[SMM Analysis] A sharp rebound in demand for air conditioning pipes led to the start of copper pipe enterprises in March and follow-up attention to the export situation of downstream enterprises.

Published: Apr 9, 2020 16:33
According to SMM research data, the operating rate of copper pipe enterprises in March was 75.73%, down 9.51 percentage points from the same period last year, and up 36.67 percentage points from the previous month.

SMM, 9 April:

The operating rate of copper pipe enterprises in March was 75.73%.

According to SMM research data, the operating rate of copper pipe enterprises in March was 75.73%, down 9.51 percentage points from the same period last year, and up 36.67 percentage points from the previous month. (research enterprises: 19, production capacity: 2.15 million tons)

In March, with the improvement of the domestic epidemic environment, enterprises also gradually returned to the normal production state at the end of the month, most of which basically reached the normal level of more than 80%, thus pulling the overall level of the industry operating rate. In addition, due to the existence of supplementary orders in February, according to SMM, the production plan of key domestic air-conditioning enterprises increased by more than 100% month-on-month in March, and the improvement of the overall order situation in the downstream air-conditioning industry in March stimulated a marked recovery in the production enthusiasm of enterprises. And some enterprises also reflect that due to the historically low copper price in March, the buying sentiment of the terminal industry is high, and it is also pulling the recovery of the industry as a whole.

In March, the raw material inventory ratio of copper tube enterprises was 15.04%.

In March, the raw material inventory ratio of copper tube enterprises was 15.04%, down 12.47 percentage points from the previous month. Raw material inventory in March is slightly higher than that in February, mainly due to the recovery of domestic logistics situation. Enterprises make certain inventory preparations when copper prices are low, resulting in the accumulation of raw materials. However, the obvious increase in output has led to a decline in the proportion of raw material stocks.

The operating rate of copper pipe enterprises is expected to be 86.74% in April.

According to SMM research, the operating rate of copper pipe enterprises is expected to be 86.74% in April, up 11.01 percentage points from the previous month and down 5.05 percentage points from the same period last year. The operating rate of copper pipe enterprises continued to pick up in April. At present, domestic downstream enterprises continue to recover, and Hubei is also normally open. It is expected that enterprises will start construction in April will be more optimistic, but at present, enterprises are also more worried about downstream exports. The outbreak of the overseas epidemic will have a negative impact on subsequent export consumption.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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