Japan Copper Tube to Keep Full Capacity Production for 2-3 Months

Japanese copper tube makers keep full capacity operation in September while they seasonally reduce the operation rate. The high production level is expected to keep through November when the demand is strong when housing air conditioner sales surged under very hot summer. However, the demand is uncertain for fiscal 2011 starting April depending on weather and economy condition.

The makers’ production in September is more than expected and they expect the production keeps same level in October. Japan Copper and Brass Association revised the tube demand outlook upward to 63,500 tonnes in second half of fiscal 2010, which is 7.9% higher than previous outlook in March.

Air conditioner represents around half of copper tube demand. The demand had decreased in recent years when air conditioner makers shift the operation to offshore plants due to decreasing domestic demand. The copper tube production hit around 30-year low at 118,233 tonnes in fiscal 2009.

However, the air conditioner sales surged in this year due to very hot summer. Japanese housing air conditioner shipment was 1.625 million units in July and 847,000 units in August, which were 24.3% and around 102.2% higher respectively than a year earlier levels while the shipment was 19.8% lower at 574,000 units in May and 5.1% higher at 1.3 million units in June, according to Japan Refrigeration and Air Conditioning Industry Association.

Air conditioner sales usually finish around mid-August and are very slow in and after September. However, the sales kept high even after mid-August. Air conditioner sales also increased for commercial application for 3 months in a row through August compared with a year earlier level.

Air conditioner makers keep high level production in September to build inventory. Japanese copper tube makers try to meet the demand by keeping full capacity operations. The full capacity operation could continue through November or December, according to industry sources.