SHANGHAI, Nov. 26 (SMM) – SMM's latest survey of 21 major domestic copper tube/pipe producers (total capacity: 1.24 million mt/yr) yielded the following insights:

1) Average Operating Rate in October Down 5.82% MoM
The average operating rate during October at the surveyed copper tube/pipe producers was 62.12%, down 5.82% MoM. Air conditioner stocks fell below 7 million units, but overseas and domestic demand for air conditioners did not experience any noticeable improvement during  October. Air conditioner output during October was 6.16 million units and considered low. The average operating rate during October at large copper tube/pipe producers was 66.4%, down 7.20% MoM, but was up 3.75% MoM at medium-size producers. This reflects the ability of  medium-size copper tube/pipe producers to rapidly adjust operating rates compared with large producers. In addition, China's National Day holiday in early October also negatively affected the average rate for the month.

It is worth noting that air conditioner stocks during October fell to 6.89 million units, a sign that finished goods destocking has almost ended, so any improvement in future market demand would boost copper tube/pipe orders.

2) Raw Material Stocks in October Down 1.42% MoM
Raw material stocks during October at the surveyed copper tube/pipe producers were 17.98% of production, down 1.42% MoM. Copper tube/pipe producers basically consumed all raw material stocks in early October as China's National Day holiday ended, but some producers increased raw material purchases in late October when copper prices fell from RMB 58,000/mt to RMB 56,000/mt.