SHANGHAI, Aug. 20 (SMM) – The average operating rate at Chinese copper tube/pipe producers fell 2.06 percentage points to 77.55% in July, the most recent SMM survey shows.
SMM surveyed 20 Chinese copper tube/pipe makers, representing 1.49 million tpy in total capacity.
Demand for air conditioners waned with sagging home sales and this year’s cooler summer. Commercial housing sales fell 3.5% to 111.9461 million square meters in H1, a marked reversal from the 29.2% growth recorded for H1 2013. Sales figures slipped through Q2.
Air conditioner distributors saw inventories mount on weaker-than-expected sales and as manufacturers ramped up production expecting greater demand for air conditioners this year. Inventories in air conditioner markets are now around 30 million units, roughly 2.5 months of output. This has begun to hit demand for upstream materials as well.
Some copper tube/pipe producers reported relatively high operating rates in July as they fulfilled prior orders. Assuming the air conditioner sales are unlikely to improve much this month, producers expect their average operating rate to fall another 2 percentage points to 75.65%.