SHANGHAI, Jul. 16 (SMM) – SMM's most recent survey of 20 major domestic copper tube/pipe producers (total capacity: 1.2 million mt/yr) yielded the following insights:
1) June Copper Tube/Pipe Consumption Weakens
The average operating rate during June at domestic copper tube/pipe producers was 80.22%, down nearly 3% MoM and 7% YoY. Since June, copper tube/pipe producers have gradually transitioned into a seasonal low-demand period, following an increase in operating rate in May, and sluggish demand for copper tubes/pipes used in air conditioners was another major factor for June's lower average operating rate. According to SMM sources, although government subsidies for energy-saving air conditioners have helped boost appliance consumption, it cannot in itself boost overall copper demand. SMM believes the average operating rate at these tube/pipe producers will likely continue falling during July.
2) Raw Material Inventories Down 1.83% in June
Raw material inventories during June at these copper tube/pipe producers were 10.97% of production, and down 1.83% MoM since producers only purchased based downstream orders. The MoM decline in raw material inventories was due to lower orders, but also due to a lack of clear future copper price trends.