According to Mysteel survey, August China copper tube/pipe production was 116kt and utilization rate was 53.77%, -3.33% MoM. Decline was driven by weak end users' demand. Some producers chose to reduce price to strive for orders.
Big tube/pipe producers' utilization rate was 62.42% in August, which remained relatively high. Big companies signed long term contract with customers and received some export orders, which helped the production steady. Middle scale producers' utilization rate was 51.7% and small companies was 47.2%. Mid-small producers' utilization rate was obviously lower than large producers because of three reasons. First, producers received short term orders, which existed uncertainty. Second, producers chose to produce according to orders to ensure production efficiency and capital liquidity. Third, high temperature impacted producers in Chongqing and Jiangsu province on electricity supply limitation.
Mysteel learns that large scale copper tube producers plan to increase output schedule as end users air conditioner companies demand expects to improve. However, part of small tube/pipe producers remains bearish view on the market. Overall, Mysteel expects copper tube production to increase in September.
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