Operating Rate at China’s Copper Tube/Pipe Makers to Fall in July on Weak Housing Market

SHANGHAI, Jul. 17 (SMM) – The average operating rate at China’s copper tube/pipe producers fell 6.23 percentage points to 79.61% in June, an SMM survey shows, with further decline expected in July due mainly to sluggish housing market.

Copious rainfall in south, east, and north China in mid-June has hurt air conditioner sales, with distributors reluctant to buy due to financial pressures from existing inventories. This has caused demand for air conditioner tube to sag, dragging down operating rate at tube/pipe producers.

Now that most buildings in China have air conditioning, new housing construction is a major driver of demand for new units. The recent downturn in housing starts and sales means that air conditioner demand is unlikely to pick up in July or August, leaving demand for air conditioner copper tube weak as well.

No surge in copper water pipe or other copper tubing used in home appliance is expected either as the home improvement and remodeling sector remains flat as well. SMM thus projects a further decline in the average operating rate at copper tube/pipe producers to 77.42% in July.

SMM surveyed 20 copper tube/pipe producers representing 1.49 million mt/yr in total capacity with their operating rates detailed below:
 

Source: SMM