SMM Cu Survey: Copper Tube/Pipe Consumption Improves in March, Still Considered Low YoY

SHANGHAI, Apr. 23 (SMM) –A recent SMM survey of 20 major domestic copper tube/pipe producers (total capacity: 1.23 million mt/yr) revealed the following insights:

1) Copper Tube/Pipe Consumption Improves in March, Still Considered Low YoY 
The average operating rate for March at domestic copper tube/pipe producers rose sharply to  80.11%, up 9.47% from February, but still below last year’s level. These surveyed producers told SMM that although copper tube/pipe orders improved significantly during March, last year’s tight market supply did not repeat this year. 

The need by air conditioner producers to build up refrigeration pipe inventories was a major factor behind the increase in March’s operating rate at domestic copper tube/pipe producers. Despite poor performances by both domestic and export air conditioner sales, there still exists a baseline demand for this important household consumer appliance. According to the NBS, household air conditioner output during March was 14.129 million units, nearly flat with the 14.627 million units from the same period last year, but still helped drive up refrigeration pipe consumption. Nevertheless, SMM believes there is little possibility that average operating rates at copper tube/pipe producers will rise significantly during April. 

2) March Raw Material Inventories at Copper Tube/Pipe Producers Low
Raw material inventories during March at domestic copper tube/pipe producers were 13.91% of production, up slightly by 1.28% from the previous month. As SHFE copper prices experienced a series of declines, producers generally took a wait-and-see stance and only chose to purchase at lower prices the minimum amount of raw materials needed for normal production.