Copper Tube Demand Rise Year By Year



Copper Tube Demand Rise Year By Year

In recent years, refined copper and consumption are on the steady rise globally. China is the greatest contributor to refined copper consumption increase. From 2004 to 2016, the increase of copper tube consumed in China made a contribution of over 150% to the same-period figure in the world. China’s copper tube processing and manufacturing market has yielded great influence to global copper tube and copper consumption increase. China now has become the biggest copper tube manufacturing country in the world. According to statistics, copper pine accounts for 12% of copper consumption and copper tube export rises by year and processing and manufacturing ability is now internationally advanced.

Scale and distribution of China’s copper tube manufacturers

Copper pine accounts for 12% of copper consumption and it is playing a decisive role. According to conservative estimation, there are over 1200 copper tube manufacturers and dealers. Let’s talk about red copper tube first. Divided by yield scale, those whose monthly yield of over 20000 tons are large-scale manufacturers, from 500-2000 tons are middle-scale manufacturers and below 500 tons are small-scale manufacturers. Nationwide, there are over 250 red copper tube manufacturers. Typical ones are Zhejiang Hailiang, Xingpeng/Naile, Ningbo Jintian, Zhejiang Jinke; Jiangsu Xingrong Meile Copper Limited, Henan Jinlong, Henan Qixing; Guangdong Jingyi,Huahong; Shandong Albetter, Hongtai, Shandong Zhongjia New Material Limited, Qingdao Hongao Copper Tube.

As for brass tube, divided by yield scale, those whose monthly yield of over 500 tons are large-scale manufacturers, and below 500 tons are small-scale and middle-scale manufacturers. Nationwide, there are over 280 brass tube manufacturers. Typical ones are Zhejiang Jinke, Shaoxing Shangyu Jinying, Shaoxing Jinlai; Guilin Lijia in South China; Henan CHINALCO Luoyang Copper.

As for bronze tube, divided by yield scale, those whose monthly yield of over 200 tons are large-scale manufacturers, and below 200 tons are small-scale and middle-scale manufacturers. Nationwide, there are over 50 bronze tube manufacturers. Typical one is Taicang Jincang.

As for Paktong tube, divided by yield scale, those whose monthly yield of over 200 tons are large-scale manufacturers, and below 200 tons are small-scale and middle-scale manufacturers. Nationwide, there are over 20 bronze tube manufacturers. Typical ones are Hailiang, Jingchuan Precision, Guilin Lijia Metal Limited.

Aluminum brass manufacturers mainly concentrate in Jiangsu and typical ones are Jiangyin Hehong Precise Technology Co., Ltd., Jiangyin Xinhuahong Copper Limited and Jiangsu Huahong Industrial Group Co., Ltd. Tin bronze manufacturers mainly concentrate in Zhejiang and typical one is Zhejiang Tiantai Caolu Copper Co., Ltd. Typical enterprises in alloy tube are Hebei Outong, Suzhou Jincang, Changzhou Pufa. Copper tube dealers are an enormous group nationwide. Those whose monthly sales volume is over 50 tons are large-scale dealer and below 50 tons are small-scale and middle-scale manufacturers. There are over 500 dealers in our country (including comprehensive traders).

Supply and demand and market prospect of copper tube

From the perspective of regional distribution, due to factors like manufacturing cost, copper tube manufacturing in conventional developed country is shrinking. Copper tube yield in Europe and North America is stable relatively but still in downtrend. Asia area boasts the biggest copper tube yield. China and some Asian countries should take this great opportunity to promote the development of copper tube manufacturers and market, thus improving international competitiveness.

In 2016, global copper tube yield reached over 3.5 million tons. China’s copper tube yield has been on the rise year by year since 2003 while that of USA, West Europe and Korea has been in downtrend. But at the same time, global demands for copper tube has been growing.

From the perspective of copper tube use and market prospect, below aspects are playing important roles:

Construction real estate industry

As of 2016, the copper tube demands in developing countries had exceeded 300000 tons while that of developed countries was still kept at million-ton level.

Refrigeration industry

The main presence of copper tube in refrigeration industry is air-conditioner water tube. Oversea market like Southeast Asia, Europe, Africa and West Asia have great demands for refrigeration copper tube.

Asia is definitely the area with biggest copper tube yield. In spite of a downtrend in air-conditioning growth, demands for air-conditioner-oriented copper tube is still increasing.

Sea water desalination and ocean engineering

Copper alloy condensing tube has good electroconductivity, thermal conductivity and corrosion resistance. It is widely used and enjoys broader future in sea water desalination and ocean engineering. Sea water special planning shows that, by 2020, China’s sea water desalination volume will exceed 3 million tons, which raises huge demands for copper alloy condensing tube.

On the whole, there is some imbalance in international copper tube processing and manufacturing market and copper mix rationality needs more improvement. For marine and communicating areas, they need high-tech copper tube whose processing is complicated and price is high. For refrigeration and construction areas, the key problem is overcapacity and fierce competition.

Refrigeration industry Air-conditioning industry is still the main demanding one for copper tube

Air-conditioning industry is still the main demanding one for copper tube. The beginning of 2018 saw a weak momentum in air-conditioning industry. The production scheduling had been in downtrend since July. August to October saw a double-digit decrease. The yield of October reached the bottom of the whole year. The industry suffered huge pressure. However, the production scheduling of key air-conditioning enterprises in December gave us a surprise.

According to certain data, in December, 2018, industrial production scheduling achieved 11.35 million air-conditioners, and a YOY growth emerged instead of a big YOY decrease. Although the growth was small, the trend was delightful. MOM growth in December over November was as significant as 38%. Below are the reasons for it to buck the trend:

The first reason is companies sprinted towards annual goal. In particular, listed companies were in great need of excellent performance in annual report. When we looked back on the beginning of 2018, outstanding performance in 2017 imposed challenges and difficulties on 2018 achievements.

Among all the production scheduling of all brands, Midea was the most highlighted, with single-month production scheduling of more than 4 million air-conditioners, almost full capacity in peak season. Now let’s talk about listed earnings of Midea this year. H1 was pretty good but increase in Q3 was just 1%, which dramatically hindered annual growth. So it’s natural if Midea wanted to sprint in the last month. Frankly speaking, Midea is a very inspiring sample for the entire industry.

The second reason is cost. Raw material price of bulk stock had been stable since the beginning of 2018, when we could even see slight decrease of price. Let’s take copper price as an example. LME copper price decreased from USD 7220.5/ton at the beginning of 2018 to USD 6200/ton at the end of November. The price of other materials also decreased including steel price. Although it’s rather difficult to seize the bottom of bulk stock raw material price, overall speaking, now it is in a low range so it’s wise of them to increase their inventory.

The third reason is inventory reserve for Q1, 2019. Chinese New Year holiday is coming in the beginning of February in 2019, which means late January to mid-February will be blanking period for production so enterprises concentrated their production in mid-December. Inventory reserve is quite normal. Production scheduling of key enterprises all went up in different level in December, wherein, AUX planned a quantity of over 1 million air-conditioners. Good performance on Double Eleven gave it a lot of confidence.

The fourth reason is enterprises accomplished environment goal. In H1, due to shortage of refrigerator oil, yield of R22 refrigerant products increased significantly. Many enterprises will make use of H2 or end of a year to adjust yield of refrigerant products (mainly raising the yield of R410a and R32 refrigerant products) to accomplish standard target annual yield determined in Kigali agreement.

The production scheduling in December went up, which stopped downtrend to some extent, but we still need to be fully aware of current reality because high inventory is still imposing pressure continuously. Although the whole industry has begun to make efforts for de-capacity but it still takes time to take effect. Meanwhile, macro economy is not so friendly and overall economic growth is unsatisfactory. In particular, adjustment in real estate is still in progress. Therefore, air-conditioner dealers and some small-and-medium brands relying on loans for manufacturing are facing huge capital pressure. Imposed on high interest and loan pressure, what can they do? In addition, significant production adjustment of enterprises also disrupted the rhythm. Now, complete-machine air-conditioner manufacturers require cost down from upstream supporting enterprises. It is heard that they require a decrease rate of 10%. Will this lead to new industrial reshuffle? Will “price war” be on thoroughly? All uncertainties!

Analysts predict that in Jan. and Feb., 2019, yield and shipment will have a significant YOY decrease. But on the whole, after two years of fast growth, a retracement is acceptable, with all resources re-structured, heat down a bit, rhythm slowed a bit. This is also necessary for an industry to have benign development. In the long run, air-conditioners are still a very potential category.