Copper pipe prices remained relatively high in the first half of 2022, with the interference of continuous scattered epidemic factors across the country. The supply and demand of the copper pipe market was lower than that of the same period in 2021, and the downstream demand was “difficult to thrive in the peak season”. At the same time, the epidemic situation in various regions was different, and regional differentiation was intensified. In July, the copper price fell sharply, and the industry continued to be bearish on the copper price in the second half of the year, and the downstream risk aversion increased. From the production and sales data of downstream air conditioners in June, the terminal demand was very optimistic, and the copper tube market was bearish. It was expected that the copper tube market would fall both in volume and price in the second half of 2022.
From January to June 2022, copper pipe prices rose first and then fell. At the beginning of January, the price of copper pipe remained at 73400 yuan / ton, up 18.8% year-on-year from the beginning of 2021. The first and second quarters were the traditional peak seasons of copper pipe production, supported by downstream demand, and the price of copper pipe was running at a high level. In the first quarter, it showed a slight upward trend. In the second quarter, driven by the cost of raw materials and the increase of downstream orders, the price of copper pipe rose significantly. By late April, the price of copper pipe hit the high of 79700 yuan / ton in the first half of the year, up 8.89% year-on-year. From March to may, dragged down by the national epidemic, the orders of downstream retail investors decreased significantly, and the copper pipe market was bearish. In the middle and late June, affected by the Federal Reserve’s interest rate hike, the price of raw copper fell sharply, and the price of copper pipe fell, falling by 6700 yuan / ton in two weeks. As of June 30, the price of copper pipe fell to 68800 yuan / ton, down 0.01% year-on-year.
The current price of copper pipe market is calculated according to the method of raw electrolytic copper + processing fee, in which the processing fee is the cost incurred in the process of producing copper pipe, including power cost, labor cost, auxiliary material consumption, equipment loss and other factors, in which the power cost accounts for more than 30%, and there is a price difference in the electricity prices of all provinces. In addition, labor costs and auxiliary materials have risen significantly, putting great pressure on copper tube manufacturers.
In addition to the rising costs in the production process, the pressure on capital turnover caused by the rising price of raw electrolytic copper is also the focus of manufacturers. From January to may 2022, electrolytic copper remained in the range of 69200-73000 yuan / ton, with an increase of more than 15% over 2021. In late June, copper prices fell sharply by more than 7000 yuan / ton, putting great pressure on copper tube enterprises, and some enterprises suffered losses.
Copper pipe production in the first quarter was 366000 tons, a decrease of 9.23% from the previous quarter, and a decrease of 2.1% year-on-year. Affected by the Spring Festival holiday in the first quarter, the downstream market started relatively slowly, and the overall consumption of the market was light; The second quarter was the traditional peak demand season for copper pipes, with a copper pipe output of 406000 tons, an increase of 10.3% from the first quarter, but due to the impact of the epidemic in various regions, it was lower than the same period last year, with a year-on-year decrease of 5.64%. In June, the downstream air-conditioning enterprises continued to reduce their production plans, and the demand for copper tubes continued to weaken. In addition, the price of copper tubes fell sharply, and the downstream just needed to purchase, so the output of copper tube enterprises fell.
According to the statistics of the General Administration of customs, the export volume of China’s copper pipe market from January to may 2022 was 161134 tons, and the export volume in June is expected to be 28000 tons, an increase of 11.63% year-on-year in the first half of 2021; From January to may 2022, the import volume of China’s copper pipe market was 12015.59 tons, and the import volume in June was expected to be 2000 tons, a decrease of 7.87% year-on-year in the first half of 2022. China is the largest supplier of copper pipes in the world, and the total export volume is far greater than the total import volume. The exporting countries are mainly Thailand, the United States, Japan and other countries. This year, domestic copper pipe enterprises started normal operation, and the export volume increased steadily.
In the second half of 2022, the copper tube market demand was negative. Affected by the slowdown of the domestic real estate industry and foreign economy, the domestic inventory of household air conditioners in the first half of the year was high, and the export market was lower than expected. In the second half of the year, the output of household air conditioners was difficult to increase, and the demand for copper tubes decreased.
In the first ten days of July 2022, the copper price fell below the market expectation. Although there was a significant rebound, it was difficult to return to the high of more than 70000. The copper pipe price was adjusted according to the trend. After the price was significantly reduced, the downstream demand was effectively released, but macro factors continued to be negative for the copper price in the second half of the year. The copper pipe price was closely affected by the fluctuation of the copper price, so the copper pipe price rebound space was limited. It is expected that the copper pipe price in the third quarter may fluctuate in the range of 64000-61000 yuan / ton.
Post time: Jul-21-2022