SHANGHAI, Dec. 27 (SMM) –SMM's latest survey of 20 major domestic copper tube/pipe producers confirmed that 50% producers are pessimistic towards orders during December and even before the Chinese New Year holiday.
50% producers surveyed believe orders during December even before Chinese New Year holiday will not be good. Finished goods inventories at air conditioner producers have exceeded those in April – the largest yearly scale, following an increase in production during November, which will propel these producers to conduct holiday promotions to cut inventories. Meanwhile, air conditioner producers will control production at low levels. Combined with finance settlements at the end of December, some air conditioner producers will appropriately cut capitals used for raw material inventories. Overall, orders of copper tube/pipe at copper tube/pipe producers surveyed will be pessimistic during December. Besides, some water pipe producers said orders will be restricted since construction is negatively affected by cold weather.
40% surveyed copper tube/pipe producers believe orders will be little changed for the near future since the turning point will be after the Chinese New Year holiday.
10% producers surveyed are optimistic towards the outlook. As air conditioner producers have slowed purchases of copper tube/pipe, operating rates at copper tube/pipe producers have remained at low levels since August 2011, which will propel air conditioner producers to replenish stocks of copper tube/pipe later.