Average Operating Rate At Copper Pipe Plants Exceeded 90% in March

SHANGHAI, Apr 21 (SMM) – Operating rates at domestic copper pipe producers stood at 90.29% in March, up 21.96 percentage points on the month and 4.72 percentage points on the year, according to an SMM survey of 23 producers with total capacity of 2.3 million mt/year.

This is higher than the expected 83.55%. Copper prices fell below 67,500 yuan/mt due to European and US banking crisis, and this prompted end-users to place orders in large numbers, pushing orders at some copper pipe plants to exceed expectations. According to a purchasing staff from a medium-sized copper pipe factory, as copper prices fell in mid-March, air-conditioner makers stepped up placing orders. “The purchase of copper cathode increased more than expected, and the inventory of finished copper pipes dropped faster. The orders that have been placed so far exceed our operating capacity and we will have to restart the idle production lines."

According to ChinaIOL, key air-conditioning companies plan to produce 16.96 million air conditioners in April, a month-on-month increase of 4.0%, and a year-on-year increase of 15%. Affected by the COVID-19 pandemic, the air conditioner production last year was low. This year, various air-conditioning manufacturers have launched frequent sales promotions. This, combined with tepid demand during the traditional peak season at the end of last year, boosted air conditioner production schedules this year.

The air-conditioning market has been actively stocking up for production during the first peak season this year. And as the cost of raw materials has fluctuated a lot recently, air-conditioning companies have also restocked in advance to lock in costs. In this case, the operating rates of copper pipe plants in April will be higher than those in March. Orders in the alloy pipe market were also brisk, driven by the growing military industry, improving small appliance sector, recovered real estate markets as well as active sales promotions of home appliances.