Off-season arrives, copper pipe & tube production declines step by step [SMM analysis]

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       The operating rate of copper pipe & tube enterprises in June was 73.65%

       According to SMM data, the operating rate of copper pipe & tube enterprises in June was 73.65%, down 8.11 percentage points MoM and 3.12 percentage points YoY. The operating rate of copper pipe & tube enterprises saw a significant decline in June, with large, medium, and small enterprises experiencing a MoM decline of 5%-10% respectively. As air conditioner production schedules declined in June, and a major OEM slowed down cargo pick-up, some copper pipe & tube enterprises focused on clearing finished product inventories, leading to a noticeable decline in new order production. Alloy pipes also faced a sluggish market, maintaining an operating rate of around 60%-65% with no significant decline in June. The installation pipe market showed improvement in late June, as the hot weather this year was delayed compared to last year, and the demand for installation pipes may be released more in the next month.

       The raw material inventory ratio of copper pipe & tube enterprises in June was 4.00%

       The raw material inventory ratio of copper pipe & tube enterprises in June was 4.00%, up 0.27 percentage points MoM. In June, copper prices rose, and spot premiums experienced multiple jumps initially and then pulled back. With the decrease in orders, downstream raw material inventories decreased.

       The operating rate of copper pipe & tube enterprises is expected to be 69.18% in July

       According to SMM data, the expected operating rate of copper pipe & tube enterprises in July 2025 is 69.18%, down 4.47 percentage points MoM and 3.48 percentage points YoY. According to the latest household air conditioner production schedule report released by ChinaIOL, the domestic sales production schedule for household air conditioners in July 2025 is 10.01 million units, an increase of 8.1% compared to the actual domestic sales in the same period last year; the domestic sales production schedule for August is 6.175 million units, a decrease of 19.2% YoY; the domestic sales production schedule for September is 5.625 million units, a decrease of 7.8% YoY. The export production schedule for household air conditioners in July 2025 is 5.794 million units, a decrease of 16.3% compared to the actual export in the same period last year; the export production schedule for August is 5.06 million units, a decrease of 8.3% YoY; the export production schedule for September is 5.025 million units, a decrease of 16.6% YoY.

       Domestic sales showed slight resilience in July, while exports have already declined significantly. Policies such as national subsidies are currently unclear, and air conditioner inventories remain high, posing pressure on both OEMs and channel distributors. After entering August and September, both domestic sales and exports are expected to decline significantly, with the operating rate of copper pipe & tube enterprises expected to be only 60-70%.

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