SHANGHAI, Dec. 26 (SMM) –SMM's most recent survey of 20 major domestic copper tube/pipe producers (total capacity: 1.23 million mt/yr) yielded the following insights:
1) Operating Rates at Copper Tube/Pipe Producers Rebound in November
November's average operating rate at the 20 major domestic copper tube/pipe producers surveyed rebounded to 72.4%, up from October's low 65.1%, and was a reflection that air conditioner producers replenished copper stocks during November. However, since air conditioner manufacturers still have high finished goods inventories, they have little interest in production, resulting in low year-end copper tube/pipe inventories compared to last year. In addition water pipe demand will fall gradually due to cold weather, so there is little possibility operating rates at domestic copper tube/pipe producers will continue to rise during December.
2) Raw Material Inventories Low in November at Copper Tube/Pipe Producers
Raw material inventories during November at the surveyed copper tube/pipe producers were 17.2% of production, up 2.1% MoM, but still relatively low and highlighted the low interest by copper tube/pipe producers in replenishing stocks. According to feedback from surveyed copper tube/pipe producers, most are not eager to increase stocks since they believe future copper prices will fall or fluctuate, and since they are experiencing year-end cash flow problems.