[Cu] SMM Survey - Operating Rates at Copper Tube Producers

SHANGHAI, Sept. 8 (SMM) -- A recent CBI survey of 20 copper tube producers (total capacity: 1.064 million mt/yr; monthly copper consumption: 52.5kt/month) revealed the following insights:

    1) Operating Rates

    Monthly copper consumption at the 20 producers was 52.5 kt during August, with an average operating rate of 59.2%, up 5.3% YoY, but down 16.6% MoM, with large and medium producers experiencing marked declines. Producers say a surge in orders from July and August helped producers keep operating rates above 75% during the seasonal low demand period. However, orders from the refrigeration sector have been falling since mid-August, so operating rates at copper tube producers will likely begin dropping during the seasonal low demand period for copper tubes in September.

    2) Inventories

    The survey also reveals inventories of raw materials held by copper tube producers accounted for 12.1% of monthly copper consumption, down 0.8% MoM. Recently, high copper prices have generated mixed views on the future price outlook. In this context, most producers were keeping raw materials inventories low in order to minimize financial risks.

    3) Forecast for September Orders

    The SMM survey reveals that 55% of producers predict September orders will flat at August levels. They said although current operating rates have fallen slightly, seasonal high demand period will begin in October, so orders will not drop. 35% of producers predict September orders will slide. They said orders from the refrigeration sector increased unexpectedly during July and August, but September is traditional low demand period for air-conditioner production, so orders will decline. The remaining 10% of producers were uncertain about September orders.

Copyright © 2009, CBI (Shanghai) Co., Ltd. All Rights Reserved.

None of this material may be used for any commercial or public use in any form or means, without the prior written consent of CBI China. For reproduction issue, please contact us by email: metalresearch@cbichina.com or tel:86-21-51550040