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US speciality brass mill Ansonia Copper and Brass Inc. has announced that it will lay off 85 of the 102 employees at its Liberty Street, Ansonia, factory in Connecticut. The plant manufactures copper alloy rod and wires. Company President Raymond McGee said "it's a very, very difficult situation". He blamed the redundancies, on top of 76 employees laid off in April 2007, on the company's struggle with escalating costs. Since 2002 electricity costs have soared 239%, natural gas 200%, fuel oil 125%, and copper and nickel 500% apiece. Ansonia's other facility in Waterbury, CT, which manufacturers copper alloy tube is unaffected by the announcement.

Further evidence of the impact of the North American economic slowdown on copper demand has recently been published by the ABMS and government statistical bodies. North American copper wirerod production plummeted 9.6% year-on-year to 174,000 tonnes in April. Output had been on a downward trend but the magnitude of the deterioration in April has still come as something of a surprise. A year-on-year increase of 2.0% in North American output January had been followed a 1.0% fall in February and a 2.7% drop in March. In April Canadian output was flat year-on-year due to improving export sales to the US, while US production fell 9.8% year-on-year and Mexican shipments slumped by 17.5%. On a year-to-date basis North American wirerod production was 2.9% lower in the four months to April 2008. Weakening demand from the automotive industry, coupled with a resurgance in copper prices and the return of Russian wirerod imports has clearly led to a deteriorating market situation for domestic mills.

Mueller Industries second quarter results highlight the tough times that the US brass mill industry is facing, but that companies can still operate profitably in a challenging market environment. The company's plumbing and refrigeration segment saw sales fall 11% to US$404m, while its operating profits dropped 32% to US$35m. The company blamed lower shipment volumes and lower spreads for the weaker performance. Sales at the company's OEM division, which includes its brass rod activities, rose 10% year-on-year to US$354m, while its operating profits rose 5% to US$19m. The improvement here is due to acquisition of Extruded Metals. Commenting on the results Harvey Karp, Chairman of Mueller Industries said "Mueller's earnings for the first half of 2008 were achieved despite the continuing decline in the housing industry, the sub-prime mortgage meltdown, the turbulence in the financial markets, rising metal costs, sky-high energy prices and a slowing national economy. Considering these adverse circumstances, we are pleased with the results."

Mention copper to almost anyone in the PCB industry these days and the first thing that springs to mind is the ongoing price increase. Although copper pricing is not directly monitored by BPA, the impact on the price of laminate and PCBs is monitored through BPA's quarterly survey for its PCB Information Service. \n\nIn the short term, forecasted increases on the demand side for copper prices are likely to remain at least at the current level. The trend in copper usage has diverged in the fact that a number of different applications now exist. \n\nAt one time, 1 ounce (35µm) copper was standard, but the average is now 0.5 ounces. Using thinner copper, if the design will allow, can, to some extent, offset a price increase. However, one segment of the PCB industry which is particularly vulnerable to copper prices is the automotive sector, where recent developments have seen the introduction of thick copper PCBs for smart fuse boxes and power electronics. These boards use 4 ounce, 6 ounce and 10 ounce copper--up to 20 times the standard thickness.

"Copper-clad aluminum wire which is composed of aluminum core clad with ETP copper was exploited to solve the problem of the copper price increasing by replacing traditional copper wire with copper-clad aluminum wire in the alternator for vehicle application. The aluminum winding alternator parameter was designed and the alternator was tested. The test data show that copper-clad aluminum can offer most of the advantages of aluminum, such as having lighter weight and lower cost than copper, but without the main perceived disadvantages of aluminum. With right parameter and well welding, aluminum winding can replace copper winding to reduce the alternator cost. "

There is no consensus among the analysts on Inmet Mining Corp.'s (IEMMF.PK) C$345-million hostile bid to take out its junior partner Petaquilla Copper Ltd. (PTQLF.PK). On the positive side, Raymond James analyst Tom Meyer wrote that by moving its stake in the Petaquilla copper project from 48% to 74%, Inmet would gain "important strategic flexibility" and lower the risk profile on the project. If Petaquilla Copper was bought out, Inmet and Teck Cominco Ltd. (TCK) would be the sole remaining partners and the legal action between Petaquilla Copper and Teck would presumably end. In a note, Mr. Meyer wrote: With two shareholders in the project as opposed to three, we believe it is safe to say that rational decision-making may likely become less of a bottleneck and the project can move forward at a faster rate. He added that by going to a 74% interest, Inmet could be in a position to potentially buy Teck Cominco's stake as well. Analyst Greg Barnes from TD Newcrest presents the negative view. He wrote that the economics of the Petaquilla project are "marginal" and figures that it would need a long-term copper price above $2.25 a pound for it to work. He also noted a "lack of clarity" on how Inmet could optimize value from the project. He wrote: Until Inmet is able to verify improved project parameters, we feel that the company is overpaying for a project that has less than compelling economics. Over at UBS Securities, analyst Onno Rutten's opinion is a little more mixed. He thinks that Inmet's C$2.00-a-share offer for Petaquilla Copper is "a steep premium," but would accelerate the project's development if it is successful. That could unlock value for Inmet. However, Mr. Rutten shares Mr. Barnes' concerns about the risks of the project; he pointed out that Inmet, a C$3-billion company, is trying to build a project that costs close to C$4-billion. He also said that Petaquilla needs strong copper prices to be economic. But he wrote that the financi

Bill Baldwin -- Baldwin Anthony -- Analyst When we see the price of aluminum in relation the price of copper become more favorable for aluminum, does that show up in your demand for aluminum fairly quickly or not at all or over a period of time? Daniel Jones -- Chairman, President and Chief Executive Officer Well that's been debated over time. We prefer Encore Wire consistently and will continually prefer to ship and sell copper. That's just the way it is. The aluminum piece of that that you're referring to is a substitution depending on the relationship between the cost of each. Normally if aluminum is more expensive so is copper and vice versa. When copper gets to a certain dollar amount, there's no question that in the conversation the substitution question comes up. There are other costs involved with that most of the time. It's not a new scenario, but it doesn't necessarily increase the demand for aluminum beyond what the increase in the demand of copper would be. But it does enter into the conversation in the quote stage pretty early on when copper gets really expensive about what would it take to substitute aluminum for this piece of copper. And so in that, it's definitely in the conversation.

Undisclosed Chinese copper fabricators reported that they plan to increase copper purchases after the summer. A representative from a copper commercial tube fabricator based in Henan province reported that the company is planning to buy more than 10,000 tonnes of copper cathode in September compared to a few thousand in July and August. In addition to term supplies booked late in 2009 for deliveries in 2010, the company will need to buy in the spot market more than 10,000 tonnes of refined copper per month in Q4 2010 because of additional customer orders. The tube maker has seen its best year yet, supported by strong demand from air-conditioner manufacturers. As a result, its copper commercial tube output is expected to rise by 15% y-o-y in 2010. A source from a copper rod producer located in Guangdong province said that some overseas clients were placing additional orders for September and October. The company uses 14,000-15,000 tonnes of refined copper per month and is likely to increase spot imports to meet extra demand. Another fabricator, which uses 70,000 tonnes of refined copper per annum to produce copper rod, plate and strip, mentioned that the Anhui-based company has a full order book for the rest of the year. Thin copper strip, consumed by the electronics industry, registered the strongest growth. Backed by strong demand, the company managed to raise its product prices to cover increased copper costs. In addition, Chinese power cable output has stayed firm and mostly unaffected by Beijing's policy controls on the property sector. Power cable production rose by 23.2% y-o-y to 14.1 million kilometres in the first seven months of the year. It was also reported that copper semis production increased by 14.5% y-o-y to 6.1 million tonnes in the same period.

It is believed that a cash crunch is reducing orders in the Chinese power sector, which accounts for 60% of the country's copper demand. Analysts predicted strong copper demand in H1 as the country was eager to repair the damages to power networks caused by the heavy snow in the early part of the year. However, repairs have so far mainly been made to aluminium and fibre-optic cables. Cash flow problems at copper rod and wire plants have occurred following the government's tight credit policy and high copper prices. Some 30% of copper wirerod production capacity is being reported idle. The cash shortages have also delayed copper buying from active copper fabricators, further dampening consumption of the metal. China, a net importer of copper, exported 31,000 tonnes of refined copper in April, up 227% year-on-year, with the possibility that the country might have been re-exporting the metal since late February. China's General Administration of Customs reported that 14,000 tonnes were exported to South Korea, six times that from the same period last year. This perhaps confirms that traders were re-exporting copper it has imported to LME-approved warehouses to take advantage of the discount between Shanghai and LME copper prices.

Neans focuses on "priority markets"

In the past few days world leading cablemaker Nexans has announced one acquisition, one new joint venture and one asset disposal. On the 30th May, Nexans acquired Intercond a leading Italian manufacturer of special cables for industrial equipment and subsea applications. The company had sales of €90m and employs 150. "This [€90m] acquisition fits totally in the Group's strategy by increasing the proportion of its business in high value-added special cables", said Gerard Hauser, Chairman and CEO of Nexans. On the 2nd June, Nexans released a press report confirming that it has formed a joint venture to create a wire and cable plant in Qatar, the country's first manufacturing facility. Qatar International Cable Company (QICC) is owned 29% by Nexans with the balance being owned by Special Projects Company and Al Neama Industrial Co. The new plant in the industrial city of Mesaleed, 40km from Doha, and will employ 210 people. By the end of 2009 it will begin manufacturing low and medium voltage cables for buildings and energy infrastructure as well as special cables for the oil and gas industry. This JV will generate sales of $150m per year by 2010 at current copper prices. Finally, Nexans confirmed that it has completed the pre-announced sale of its copper telecom cable plant at Santander in Spain to the British company B3 Cable Solutions for €17m. These three actions continue to refocus the group's strategy on priority market segments.

An official from SDI La Farga LLC's said on 11th December that the company is producing limited amounts of wirerod at its new US $39M plant in New Haven, Indiana. The new facility, a joint venture between Spain's La Farga Group and Steel Dynamics Inc, produces wirerod from number 2 scrap copper rather than cathode. The company official said "we've produced quality rod and are in the process of getting approval of customers and we have done so with several customers." He added that plant officials are "waiting for more customer orders to start producing more".

Anhui Jincheng, the Shanghai-listed producer of copper PSSF, said on 26th March that it produced 93,872t of copper PSSF in 2012, a 13% y-o-y increase from 2011. Despite the increase in output, the company made a net loss of RMB57M in 2012 from a profit of RMB24M in 2011 (loss of US$9M from a profit of US$3.8M). Remarking on the results the company said that "uncertainties in the global economy, the euro debt crisis, plus the weak Chinese economy, has negatively impacted demand by the downstream processing sector last year."

Talking at the annual CESCO/CRU World Copper Conference, CRU Principal Consultant Vivienne Lloyd said that up to 2Mt of copper demand could be lost over the next five years due to substitution and consolidation amongst Chinese semis producers. Lloyd said that the areas under the greatest threat from substitution are the automotive wiring harness sector and the HVAC sector. However, CRU believes that the aluminium/copper price ratio is likely to have peaked in 2012 at around 4:1, and will fall back gradually to 2017 reaching 3:1, which should relieve some of the substitution pressures.

Chinese imports of copper and copper products in February increased by 42% m-o-m to 329,311 tonnes. Bloomberg reported that this is the highest increase in inbound shipments since 2003. LME copper prices have jumped by 19% since the beginning of the year, reaching US$3,667 per tonne on March 10th. Copper prices have been supported by optimism regarding the Chinese and the US government spending packages. Infrastructure projects will boost the demand for copper semis, especially cables and tubes.

H1 reports from China's metal companies have revealed difficult operating conditions as rising energy prices, investment in environmental protection and an increase in resource tax have squeezed margins. Shares in the metal index fell 58.6% in the first half of the year, underperforming the SSE Composite Index which saw a 48% decrease. Copper companies fared better than most as the copper price remained at historically high levels and prices of sulphuric acid - a byproduct of the copper treatment process - soared. Jiangxi Copper, China's biggest producer, reported strong results with a 55% surge in revenues year-on-year. Net profit grew at the slower rate of 32.8%, reducing the company's profit margin to 10.4%, from 12.1% in the first half of 2007. The company has a slightly bearish outlook for the rest of this year, as the continued slowdown in the global economy takes its toll on copper demand and the appreciation of the dollar puts downward pressure on copper prices. However, it suspects copper supply will remain tight, which should support prices on the downside. Yunnan Copper Company struggled in the first half as revenue fell 18.9% and net profit plunged 29.5% y-o-y. The companies profit margin was cut to 3.8%, from 4.4% in the first half of 2007. A 45-day machine overhaul was blamed for the poor sales figures as output remained flat, whilst high energy prices pushed up production costs. Tongling Nonferrous Metals saw similar problems to Yunnan as rising raw material prices and fluctuations in the copper price cut the gross margin in the firm's copper unit to just 0.59%. Company-wide results were improved greatly by the strong performance of sulphuric acid, where gross margin increased to 71.6%, bringing Tongling's profit margin to 2.9%, up from 2.0% in H1 2007.

NEW YORK (MarketWatch) - Copper futures jumped Wednesday after news that a 5.8-magnitude earthquake hit Chile, the world's top copper producer. Copper futures for December delivery rose 3.6 cents, or 1.2%, to $3.12 a pound. Copper fell in morning trading. The U.S. Geological Survey reported the earthquake hit 63 miles east of Iquique, Chile, a major copper mining area.

Positive expectations for copper producers have been generated by the recent increases in copper prices that reached US$4,725/t on the LME on 17th April. In Germany, copper smelter Aurubis expects that backed by rising prices the company will achieve oparating profits in the current fiscal year. Due to writedowns, the group suffered net losses in Q1 2009. In Poland, copper miner KGHM said that higher than expected prices may support the company to surpass its forecast. As a result, the company is updating its budget assumptions.

Copper prices tumbled to a five-week low Thursday on expectations that falling demand from China and a slowdown in the U.S. housing market will lead to a surplus of the metal. Other commodities traded mixed, with crude oil rebounding slightly and gold, silver and soybeans falling. Corn and wheat futures rose. China, the world's biggest buyer of copper, has been importing less of the metal since the completion of most major construction projects heading into the Beijing summer Olympics. Copper imports in June fell 20 percent compared to May, China's custom's agency said this month. As a result, stockpiles of the metal have swelled in Shanghai and London, helping drive down prices.

""There have been sharp technological advances in the auto sector, which requires highly functional copper," Keiichi Kobayashi, corporate senior vp, automotive and electronics material field, copper and high performance material products division, told Metal Bulletin sister title Copper Price Briefing. The growth in the auto market increases demand for the company's highly functional copper products, he said, adding that demand from the electronic devices markets such as mobile phones was good but can fluctuate a lot. The company's product share is comprised of 40% automotive, 40% electronics and 20% infrastructure."

"Besides an imbalanced market, renewed U.S. dollar strength could also weigh on copper prices. Additionally, there is also the rising threat of substitution over the long term. Nomura's Jones estimates around 75% of demand could be at "medium or high risk" of substitution." In many instances, copper could be replaced by aluminum, which is markedly cheaper than copper even after adjusting for differences in conductivity. Jones sees air conditioning and auto manufacturing as key areas where the compelling economics of aluminum pose a major threat to copper demand."

Tokyo-based Kobelco & Materials Copper Tube (KMCT) announced plans to increase copper alloy tube output to 500tpm in the year April 2009 - March 2010, an increase of more than 170% on current production levels. At present, KMCT's plant in Hadano, Japan produces 180tpm of phosphor bronze tube, which serves the heat-pump water heater market. The firm cited growing demand from other end-use markets, as copper prices remain high, as the reason for the expansion. Copper alloy tube consumes 30% less copper metal than copper tube thanks to its thinness. The price of a copper alloy tube is higher than copper tube of the same weight, however, users can gain a cost advantage from lower copper consumption per metre.

Intraday copper three-month prices on the LME rose by 4.1% to US$ 2,940 per tonne on December 29th compared to the closing price on December 24th, affected by higher oil prices and the weaker US dollar. Increases in oil prices are correlated with increases in copper prices since investors see oil as a barometer for the entire commodity class. Then, the weaker US dollar makes metals cheaper for holders of other currencies. However, analysts remain pessimistic about the red metal due to plunging demand as the ongoing economic slowdown will continue to take its toll on the demand for copper.

Assomet, Italy's non-ferrous metals association, reported that domestic production of copper and copper alloy semi-finished products contracted 5.4% y-o-y in 2011 to reach a total yearly output of 1.051M tonnes. This was attributed to metal price volatility impacting clients' procurement activity in addition to substitution losses, which continues because of the ongoing European debt crisis and its implications upon consumers' price sensitivity. Assomet also added that pure copper metal products have and will be more negatively impacted than copper alloy semis due to a higher copper intensity. This led to a drop of about 8% y-o-y in copper semis output this year, reaching 549,000t and production is expected to fall by 3% y-o-y in 2012. Whereas copper alloy semis output declined by 3% in 2011, reaching 502,000t. Production is anticipated to hold at the same level in 2012.