October Copper Pipe & Tube Operating Rate Improves, Expected to Further Increase in November! [SMM Analysis]

The operating rate of copper pipe & tube in October was 72.51%

According to the SMM survey, the operating rate of copper pipe & tube enterprises in October was 72.51%, up 7.16 percentage points MoM and up 4.11 percentage points YoY. Despite the National Day holiday and the fall back from highs in copper prices, large copper pipe & tube enterprises had sufficient orders. The actual holiday time before the National Day was shorter than expected, and with the increase in production schedules of major manufacturers in mid-to-late October, orders exceeded expectations. Therefore, the actual operating rate of copper pipe & tube in October was higher than expected. Orders for medium-sized copper pipe & tube enterprises were mixed, with those focusing on air conditioning pipes seeing an increase in orders, while those focusing on installation and supporting copper pipes remained stable. Small copper pipe & tube enterprises, mainly producing alloy pipe series, still relied on orders from military and marine sectors, and export demand was also considerable. Currently, the trade-in policy for home appliances has significantly boosted the market, and air conditioner enterprises are actively scheduling production. Additionally, favorable policies for the real estate sector have been frequent this year, and some enterprises expect a recovery in the real estate market, heating up the household copper pipe & tube sector.

The raw material inventory/ouput ratio of copper pipe & tube enterprises in October was 4.70%

The raw material inventory/output ratio of copper pipe & tube enterprises in October was 4.70%, up 0.73 percentage points MoM. During the National Day holiday in October, enterprises had stocked up raw materials, and with the increase in orders, the raw material inventory also increased. Overall, the raw material inventory/output ratio rose.

The operating rate of copper pipe & tube enterprises in November is expected to be 73.51%

According to SMM data, the operating rate of copper pipe & tube enterprises in November 2024 is expected to be 73.51%, up 1 percentage point MoM and up 4.62 percentage points YoY. According to the ChinaIOL household air conditioner production schedule report, the domestic production schedule for household air conditioners in November 2024 is 6.197 million units, up 18.5% YoY, and the December domestic production schedule is 7.392 million units, up 21.0% YoY. The export production schedule for household air conditioners in November 2024 is 8.995 million units, up 65.5% YoY, and the December export production schedule is 10.88 million units, up 48.5% YoY. Both domestic and export sales are expected to be strong in November, with export sales being particularly robust, driving the operating rate of the copper pipe & tube industry in November. Additionally, with Trump's election victory, there may be a front-loading of overseas orders, and considering the overseas Christmas holiday in December, domestic export orders in November may further increase.