Trends, copper

According to China Minmetals, China's refined copper consumption will grow 5.2% in 2012. This compares to an average growth rate of approximately 15% between 2005 and 2010. The company maintains that the growth in consumption will be proportionately higher than growth in domestic copper output however.

According to the General Research Institute of Mining & Metallurgy, it is a misconception to that 50-60% of copper is absorbed by China's power industry. The industry body posits that 30% of copper consumption is attributed to infrastructure projects, which include power, rail and telecommunications. 21% is absorbed by the construction, 20% for the production of consumer goods and 7% by industrial equipment manufacturers. The research institute forecasts copper consumption growth of 5% in the power industry this year and considers it to be the key driving force behind overall Chinese copper demand, which it expects to increase 4.1% in the same period.

Xingye Copper International Group plans to commission its 25,000t/y copper plate and strip project in Zhejiang province by 2014. The company already operates a copper and copper alloy plate and strip plant.

Aurubis AG, the Germany-headquartered refined copper cathode and copper products fabricator, reported a weak performance in sales of copper products in the first quarter of this year. In Q1, the outputs of wirerod; pre-rolled strip; continuous cast shapes; rolled products and speciality wire reached 179,000t, 41,000t, 47,000t and 60,000t, down by 17% y-o-y, down by 15% y-o-y, up by 2% y-o-y and up by 329% y-o-y, respectively. Generally, the seasonal upswing in Q2 was weaker than expected, however, there was a mixture of performances in the sectors within each market, as some wirerod market sectors ordered strongly but European semi-fabricators and customers of strip and speciality wire continued to order shrinking quantities at late notice.

Aurubis reported a growth outlook for its copper products business unit. The company said that the performance of copper wirerod depends upon the progress of power grid expansion projects in Europe. The automotive sector is expected to continue to support growing wirerod sales for the next few months, however the enamelled wire industry is expected to remain weak attributed to poor demand in southern Europe. North American demand is anticipated to support growth in shipments of copper shapes as well as the company's market for flat copper products. In this regard, the US electronics and electrical industry, engine cooling and distribution segments are expected to continue improving. Stagnant European and Asian demand for flat copper products will partially undermine growth in North America. The company added that it does not anticipate the Asian copper products market to recover until the end of Summer 2012, at which time, demand in the US is expected to be good and demand from European-based operations will be recovering.

Nexans SA, NKT Holdings and Goldman Sachs Group Inc., a previous owner of Prysmian SpA, are due to attend a hearing on 11-18th June 2012 as part of the European Commission's (EC) probe into an alleged underground and submarine high voltage power cable cartel. The EC received official complaints about 12 companies in July 2011. The maximum fine for colluding to fix prices is 10% of yearly sales revenue.

The China Non-ferrous Metals Fabrication Industrial Association (CNFA) announced that it is considering legislative changes that could see more stringent standards for introducing new copper processing facilities in China. The association warned that there could be a copper products surplus in 2015 following the start-up of new projects, adding that processing capacity should not exceed production by more than 15%. CNFA figures indicate that China produced 10.28Mt of copper products in 2011, up by 18% y-o-y. Processing capacity and utilisation rates were estimated at 12Mt/y and 90% at the end of 2011.

Furukawa Electric announced on 8th May that it has developed a new type of aluminium alloy wire harness that is strong enough to be used in car doors, engine compartments and other locations traditionally reserved for copper wiring harness. The newly announced product features are expected to enter commercial production in 2014.

The Italian association Assomet expects production of copper and copper alloy semis to fall by 2.4% in 2012, to 1.0Mt, mainly attributed to poor end-use demand, worsened by increases to housing and value-added taxes. Orders are erratic and the Italian copper semis production sector is currently operating at 50% capacity utilisation, whereas the copper alloy semis sector is slightly higher at 60%.

Assomet, the Italian non-ferrous metals association, released figures indicating that the output of copper and copper alloy semi fabricated products fell by 4.8% y-o-y to 1.1Mt in 2011. Copper semi-fabricated products output fell by 6.7% to 556,100t in 2011, while copper alloy semis production declined by 2.8% to 501,500t. The association noted that there was a sharp deterioration in demand in Q4 2011 as concerns grew about the country's debt.

According to Antaike, by 2015, Chinese consumption of copper is expected to rise by 66% from the level seen in 2011. In 2011, the nation consumed 7.4Mt of copper, which is expected to grow to 12.2Mt in 2015. The research organisation attributes the key growth drivers to power, transport and new energy sectors.