SHANGHAI, Sept. 16 (SMM) – The average operating rate of Chinese copper tube/pipe producers fell 1.49 percentage points to 76.06% in August, the most recent SMM survey indicates.

Large producers managed to keep operating rates above 80%. Mid-sized producers, however, saw their operating rates off another 3 percentage points on the heels of July’s 11-percentage-point slump. Operation rates at small producers have now slipped below 65%.

Excluding market leaders, air conditioner makers saw production slow in August, undermining demand for copper pipe. Both air conditioner producers and distributors are suffering from growing inventory pressures. Inventories in July were 15% higher than last year. AC compressor output plunged nearly 20% in August, though inventories are 33% higher than last year.

Although exports of copper tube/pipe usually pick up in October, expectations of a sluggish September mean that producers are unlikely to ramp up production, preferring to sell down existing stock first. SMM thus expects the average operating rate at these producers to hold around 76% in September.


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