SHANGHAI, Apr 30 (SMM) – Manufacturing activity across Chinese copper downstream industries expanded at the fastest pace in more than a year in April, as businesses resumed work and logistics recovered from the coronavirus-led shutdowns.
The SMM survey released Thursday showed that the purchasing managers' index (PMI) across construction, power, electronics, transport and home appliance sectors in China climbed to 54.82 in April, standing above the 50-mark that separates growth from contraction on a monthly basis for a second straight month.
April’s reading was the highest since March 2019, following March’s expansionary 51.55 and a sharp collapse of 37.97 in February when China's economic activity ground to a standstill.
The fast expansion across copper downstream sectors came as official data and a private survey pointed to an easing or even a contraction in China’s overall manufacturing activity in the past month. Earlier on Thursday, the National Bureau of Statistics (NBS) said that its PMI for China’s manufacturing sector eased to 50.8 in April from 52 in March, while the Caixin/Markit manufacturing PMI, which focuses mostly on small and export-oriented businesses, fell from 50.1 to 49.4.
A substantial drop in export orders and more layoffs caused by the pandemic which prompted world authorities to impose more stringent containment measures in mid-March, contributed to the downbeat readings for overall factory activity.
Back to the copper downstream sectors, the SMM survey’s sub-index for new export orders slipped to a contractionary 49.77 in April, from an expansionary 52.17 in March, as the export sector, especially for electronics and home appliances, took a hit from heavy lockdowns worldwide.
The slump in export orders limited the growth in overall new orders in April, with the sub-index for new orders inching up 0.11 to 52.95, propelled by the contraction and power sectors.
Production across copper downstream sectors expanded rapidly in April, with the sub-index jumping 5.41 to 58.48, as new and backlogged orders kept producers in high gear.
A slowdown in new infections in Europe and the US, massive stimulus efforts by central banks and Beijing’s infrastructure push calmed investor nerves and gave a substantial lift to copper prices. Copper on the Shanghai Futures Exchange rallied 9.7% in April, which was the first monthly increase in four months and the biggest monthly percentage gain since November 2016.
The sub-index of raw material purchasing prices across copper downstream industries surged 15.48 from March to 54.39 in April.
Raw material inventory sub-index increased 7.95 to 53.7 in April, as greater orders and rising prices encouraged processors to step up stockpiling raw materials.
The sub-index for supplier delivery time index rose 5.86 to 53.59 as eased transport curbs and frozen highway toll fees prompted firms to speed up deliveries.
The respective April PMIs for the five copper downstream sectors were all in expansionary territory, with construction, power and transport growing faster while electronics and home appliance slowing down.
