Operating rates at copper tube producers missed expectations in February

SHANGHAI, Mar 11 (SMM)—Operating rates at domestic copper tube producers stood at 62.67% in February, 20.04 percentage points lower month on month but 23.61 percentage points higher year on year, according to an SMM survey of 22 producers with total capacity of 2.27 million mt/year. The decline in copper tube operating rates was larger than expected, as surging copper prices after the Chinese New Year (CNY) holiday dampened the recovery of downstream consumption.  Most of the large-scale producers reduced the number of days of the holiday or operated normally, while small and medium-scale producers mostly started the holiday from early February and restored production after February 26.

The feedstock inventory/monthly output ratio at copper tube makers stood at 15.91% in February

In February, the ratio of raw material inventory to total production stood at 15.91%, an increase of 1.58 percentage points from the previous month. Some copper tube producers stockpiled raw materials before CNY, but post-holiday hiking copper prices curbed downstream consumption, which slowed their consumption of raw materials. 

Operating rates to rise to 81.73% in March

SMM expects operating rates of copper tube producers to gain 19.06 percentage points on the month and 6 percentage points on the year to 81.73% in March. Scheduled production at major air-conditioning manufacturers surged 106% month on month in March, which is likely to encourage copper tube producers to step up production. Copper tube plants have basically resumed operations currently, and a large-scale producer reported more than 90% capacity utilization rate. They are expected to accelerate production in March as orders increase.