SHANGHAI, Apr 8 (SMM) – Manufacturers of copper tubes and pipes in China stepped up operations in March as they recovered from the Chinese New Year holiday and as the value-added tax cuts spurred consumption.
An SMM survey showed that operating rates across copper tube and pipe producers averaged 85.24% in March, up 22.84 percentage points from February but down 2.11 percentage points from a year ago.
Capacity across 19 producers in the survey grew from 2.08 million mt/year to 2.13 million mt/year as some producers expanded their capacity.
Data for March fell short of the expectations of 90% as high stocks of household air-conditioners eroded production enthusiasm among copper tube and pipe producers.
The ratio of raw material inventory to output at copper tube and pipe producers declined 4.82 percentage points from February to stand at 14.08% in March, as the VAT cuts bolstered spot copper premiums and kept copper tube and pipe producers from purchasing.
Copper tube and pipe producers stockpiled for the CNY break in February, and this also led to a decline in stocks of raw materials in March.
On a yearly basis, the ratio of raw material inventory to output at copper tube and pipe producers gained 2.32 percentage points last month.
The average operating rate across copper tube and pipe producers in China is expected to grow 3.21 percentage points month on month to stand at 93.21% in April, up 2.89 percentage points from a year ago, as air-conditioner producers step up output.