Copper Survey - Operating Rates Remain Flat at Copper Tube Producers

SHANGHAI, Jan. 5 (SMM) -- A recent SMM survey of 17 copper tube producers (total capacity: 1.068 million mt/yr) revealed the following insights:

1) Operating Rates Remain Flat
According to the survey, overall operating rates at the 17 copper tube producers were 68.5% in December, slightly down from 71.0% in November.  This is the tradition peak demand season for copper tube at air-conditioners, and air-conditioner factories needing to build stocks for the high demand season made large volume purchases.  Orders at copper tube producers received in late December improved greatly, and in this context, SMM predicts operating rates for January 2010 will further increase.

2) Raw Material Inventories Fall, Exports Improve
Raw material inventories at copper tube producers were 13.2% of consumption in December, down from 14.6% in November, but still high compared with past years.  Among the 17 copper tube producers, the proportion of copper tube exports to output was up significantly to 17.7%.   The large increase was due to economic recovery in Europe and US, and due to the previous lower price ratio.  According to SMM sources, the US government will announce a decision in  March 2010 over whether or not to impose anti-dumping taxes on Chinese copper tubes, with the result directly affecting the outlook for Chinese copper tube exports.  However, any negative impact on China's copper tube exports will ease gradually as copper tube plants in other overseas market owned by Chinese copper tube producers are able to export goods directly to the US.

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