Japanese Copper Tube Production Slightly Slows in 2H F2011

Japanese copper tube makers’ production volume represents slightly lower in and after October than they originally planned. The makers expected strong demand condition continues for the second half of fiscal 2011 ending in March 2012 and set relatively high output plans for the second half in July-August. However, the actual demand from air conditioner makers slowed down in and after late August.

Copper tube production in Japan was average 12,434 tonnes for April-July. Japanese major four copper tube makers’ capacity is estimated to total 12,000-13,000 tonnes per month. These figures suggest copper tube makers were in full capacity production.

In Japan, end consumers’ demand was strong for energy saving type air conditioners this summer. Copper tube orders didn’t decrease in August although the demand seasonally slows down in usual years. Another factor was that copper tube supply had maintained tight since hot summer of last year. Thus domestic copper tube makers estimated order volume could keep steady in the second half year.

In fact, air conditioner sales weakened since electricity shortage was not as serious as concerned in TEPCO’s service area for July-September. Rapid temperature down in and after mid August also slowed down air conditioners’ sales. Air conditioner makers turned into output adjustment and immediately reduced copper tube orders.

One major copper tube maker explains current copper tube production is several percentage points lower than the original plan for October-March. For October-December, Japanese copper tube production is forecasted to keep the level at around 11,000 tonnes per month, as high as for April-September, or slightly lower.