SHANGHAI, Mar. 12 (SMM) –SMM's most recent survey of 21 major domestic copper tube/pipe producers (total capacity: 1.24 million mt/yr) yielded the following insights:
1) Average Operating Rate for February at Copper Tube/Pipe Producers Rises to 70.64%
The average operating rate during February at the surveyed copper tube/pipe producers rose sharply to 70.64%, up 16.15% from January. Despite gradual improvements in demand, overall consumption of copper tube/pipe was still below last year's level for February, and was largely from a YoY decline in demand from air conditioner manufacturers.
The air conditioner sector is a major consumer of copper tube/pipe, but stocks of finished air conditions are high due to poor domestic and export sales, causing a sharp drop in demand for refrigeration pipe and may continue to dampen demand during March. Consumption of brass tubes used in water and heating facilities, however, was relatively strong in February.
2) Raw Material Inventories Fall to 12.63%
Raw material inventories at copper tube/pipe producers were 12.63% of production during February, down 5.02% from January. The majority of surveyed producers expressed little interest in buying raw materials due to sluggish orders. In addition, SHFE copper prices have recently fluctuated around RMB 60,000/mt and producers would only consider replenishing stocks below this price.