China copper downstream activity expanded for 2nd month in traditional high season

SHANGHAI, Nov 1 (SMM) – A traditional high season kept major Chinese copper downstream industries in expansion in October for a second straight month, but the growth was slower than expected, raising questions that how fast those sectors will slow in the coming winter.

The latest SMM survey showed that the purchasing managers' index (PMI) across construction, power, electronics, transportation and home appliance sectors in China dipped 0.45 from a month earlier to 50.66 last month.

This was the second month in a row for the print to stand above the 50-mark that separates expansion from contraction. SMM had expected the index to rise from 51.11 in September to 52.57.

Construction and home appliances slipped into contraction last month, with the PMIs coming at 49.52 and 49.4, respectively.

Colder weather took a toll on construction, while home appliance producers scaled back operations on seasonality and high inventories across the industry chain.  

Electronics was the star performer last month, with the PMI standing at 52.32, as producers swung to high gear to prepare for the forthcoming shopping season.

The automobile sector saw improvement in marginal production, while the power sector maintained stable production and saw healthy demand.

The sub-index for production edged down 0.38 to 51.51 in October. With northern regions entering the heating season, companies that are major sources of pollution, faced stricter production curbs to battle against heavy smog.

New orders sub-index stood at 51.64 last month, slightly down from 52.53 a month ago. New orders across copper downstream sectors held stable in a high season, but there were signs of a weakening.

New export orders crept into expansion territory last month, up from 47.74 in September to 50.04.