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Jon Barnes

Mueller Industries posts weaker Q2 earnings - 0 views

shared by Jon Barnes on 22 May 08 - Cached
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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.
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    Tough times in the US brass mill industry
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    Dowa Metanix announces capacity increase Company announces new pickling line and facility renewal Dowa Metanix, the rolled copper maker of the Dowa Metaltech group announced it will invest around ¥2 billion (US$ 19 million) in a new pickling line and renewal facility during the current fiscal year which began in April 2008. The new pickling line is expected to begin operations early in the fiscal year 2009 and the new line and improved facilities are expected to improve the firm's cost competitiveness. The company then said it plans to expand output capacity by 40% to 1,200 tonnes per month by 2010 as it tries to improve productivity to increase its supply for connector pins and semi conductor lead frames.
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    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.
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    Hot on the heels of the news that Nexans was to build a joint venture in Qatar to construct the country's first wire and cable factory , comes today's news that El Sewedy Cables of Egypt is also to build a $150m power cable plant in Qatar. The 30,000tpy capacity plant will start operating at the end of 2009 or early 2010 and will mostly sell to the domestic market. El Sewedy will own 50% of the company and Qataru based Aamal Holding will hold the remainder. El Sewedy is currently building new cable factories in Algeria and Saudi Arabia, with both expected to start later this year.
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    Turkish copper semis producer Sarkuysan expects its output of copper products (wirerod, wire, tube and billet) to rise from 185,000 tonnes in 2007 to around 200,000 tonnes in 2008. According to the General Manager Hayrettin Cayci, "The market is forcing us to increase production as demand, particularly in Turkey, is very healthy", adding that demand came mainly from a Turkish property construction boom. "There's a big boom in demand for energy cables. Plus developed European countries have pulled away from cable production and they're mainly supplying from countries like Turkey". However, high copper prices have eroded profit margins so the company is focussing on more higher value products. He expected total Turkish copper demand (refined and scrap) to rise above 500,000 tonnes this year, from 450,000 tonnes now, and by 2010 he expected demand would reach 600,000 tonnes. Refined copper consumption is currently around 300,000 tonnes.
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    The Exsym Corporation, the joint venture between SWCC Showa Holdings and Mitsubishi Cable Industries, has announced plans to expand its exports of ultra high voltage cables to the Middle East and South East Asia. In order to meet this increase in demand, a horizontal sheathing line has been transferred to the company's Aichi plant in Japan. This will bring the number of sheathing lines for ultra high voltage cables at the plant to three, once the transferred line begins commercial operation over the summer. Exsym also plans to renew one of the two conductor stranding lines at the Aichi plant with the new line expected to begin commercial operation in November 2008. With these new lines as well as an increased number of construction staff, copper cable capacity at the plant is expected to grow by around 200 tonnes per month to 1,200 tonnes per month. In the fiscal year 2007, Exsym posted revenue of ¥41 billion ($0.39 billion) with an operating profit of almost ¥2 billion ($0.02 billion). Exports of ultra high voltage cables to the Middle East and South East Asia accounted for around 40% of the total revenue. The company expects the increase in export capacity to increase revenue to ¥43 billion ($0.41 billion) per year by the end of the fiscal year 2010.
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    Mitsubishi Shindoh is to invest Yen6-7 billion to expand production of copper strips at its Sambo plant in Osaka, Japan. This will increase capacity from 3,200 tonnes per month (tpm) to 4,200tpm by March 2010. In addition, the company will transfer 800tpm of copper strip production from its plant in Wakamatsu, Fukushima, Japan, bringing total production capacity to 5,000tpm. Mitsubishi Shindoh will also spend Yen6 billion to improve its copper alloy strip capabilities at its Wakamatsu plant. Productive capacity will remain at 6,500tpm, but with an increased ratio of high quality products. As a result, total company capacity will grow by 40% to 11,500tpm. Mitsubishi Shindoh is a copper and copper alloy fabricator within the Mitsubishi Materials Group. Japan mills have recently seen a strong growth in orders from the semiconductor, leadframe, connector and automotive industries, and clearly expect this to continue.
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    Hindalco Industries and Sterlite Industries - the two privately owned Indian copper smelter/refinery/rod producers - are considering changing their domestic pricing mechanism for copper due to the dramatic rise in oil prices. At present, a uniform pricing system for customers all over the country is in place, however, the companies are mulling a change to ex-works pricing. This would mean that customers would be charged a different price depending on their delivery destination from the smelter. To balance the recent hike in fuel prices, they had recently started levying a Rs2/kg freight charge across the country irrespective of distance. Diesel is used in firing the furnaces while furnace oil is used in running them. The total fuel cost is estimated at 10-12% of the price of copper, with 1% of this being the transportation cost. The fuel price hike has not affected domestic copper demand as yet, but a prolonged period of this sentiment may hit many developing infrastructure projects badly.
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    Jiangxi Copper said it expects Chinese refined copper consumption to grow at 8-10% this year driven by investment in the power industry. Power generation accounts for between 50-60% of all copper used in China. Damage to power generation capacity caused by this year's earthquake in Sichuan province will require a major rebuilding program which will also stimulate copper consumption. Chinese refined copper imports fell by 23% year on year between January and April, however, this decline was at least partly explained by a 23% expansion in Chinese refined copper production during the period. Wu Yuneng, General Manager of JCC Southern Copper said, "We need more concentrate and scrap rather than refined copper".
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    Four major Japanese copper tube producers plan to reduce production by 4% year-on-year to 84,220 tonnes in total during the first half of the fiscal year 2008 (April 07-March 08). It is reported that demand for copper tubes has fallen because of the inactive construction industry as well as high copper prices. The construction industry saw a major slowdown last year after the introduction of new building regulations. All four producers expected this weak trend to continue. Sumitomo Light Metal is the only producer who plans to increase its output estimate, but only by 1% year-on-year. Kobelco & Materials Copper Tube says that it would decrease normal tube output for export to adjust the inventory level at its Malaysian operation. Furukawa Electric and Hitachi Cable said they would need to focus more on their commercial tube businesses. It is believed that the tube market has also been hit by substitution from aluminium.
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    As of the 30th May, the Optical Cable Corporation acquired Superior Modular Products Incorporated (known in business as SMP Data Communications) in a deal worth $11.5 million. SMP Data Communications is now a wholly owned subsidiary of the Optical Cable Corporation. The President and CEO of Optical Cable, Neil Wilkin, said the acquisition would enable the company to expand its product offerings with more complete cabling and connectivity solutions, including fibre optic and copper connectivity. SMP Data Communications manufactures more than 2,000 products including cutting edge Category 6a connectivity solutions which offer a 10 Gig throughput.
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    A subsidiary of Japanese company Sumitomo Electric Industry Group, Sumitomo Electric Wintec Inc, has recently developed a new type of winding wire. The HGZ is a scratch-resistant winding wire for varnish impregnation for compressor motor. The company has started selling this new type of winding wire. This new development improves the adhesive tendency of varnish which solves the problem of varnish impregnation in fixing coil from traditional scratch-resistant winding wire. It also improves the energy efficiency of motor as it forms coil with higher density. Sumitomo Electric Wintec specialises in copper-based magnet wire and it serves mainly the manufacturers of air conditioners, automobiles, refrigeration equipment and televisions.
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    Luvata's ECO-Heatcraft division has launched a new technology for its air conditioning and refrigeration systems based upon using carbon dioxide as a refrigerant. The company believes that, as well as offering zero ozone depletion and less effect on global warming, the use of carbon dioxide can also allow more efficient operation of the system than traditional refrigerants. Luvata claims that, "The higher volumetric efficiency of carbon dioxide (known as R744) means that the cross sectional area of pipes used in heat transfer equipment can be reduced. As a result, equipment has the potential to be smaller, lighter, more efficient and better for the environment". The development of smaller diameter pipes with reduced wall thicknesses would tend to favour existing inner grooved copper tube based designs rather than emerging aluminium based technologies.
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    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.
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    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."
James Wright

China - New 400,000t/y wirerod plant enters trial production phase in Guangzhou province - 0 views

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    It was reported that China's Amer International expects to complete construction of its new 250,000t/y copper rod production line, located in its Chaohu City facility in Anhui Province, by year-end. The expansion project will bring Amer's production capacity to 500,000t/y and its total copper rod production is anticipated to reach 200,000t in 2011. A spokesperson for the company said that it will manufacture rod for both domestic and foreign export markets. In addition, Amer also intends to source copper cathode for rod-processing from within China and also overseas. Total investment for the project amounted to RMB2.5B.
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    Jiangxi Copper has said that it will start-up a new 400,000t/y wirerod and wire plant in H2 2012, after missing its scheduled commissioning month of May due to the onset of the rainy season. The plant, which is based in Zengcheng city, Guangdong province, will be fed by refined copper produced by the company's smelting/refining operations resulting in less Jiangxi Copper cathode available to the domestic market. After startup, the company's semi-finished copper products capacity would double to almost 900,000t/y. Whereas Platt's figures indicate that Jiangxi's cathode production is expected to rise by a smaller value of around 150,000t to reach 1.09Mt in 2012.
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    Leyuan Group has started-up 40 copper foil lines with a total annual production capacity of 10,000t. The new plant is located in Tianjin City, Tianjin province and will be supplemented with two further phases of capacity expansions. The second phase lines are expected to be commissioned in June 2012 while the final phase capacity expansions will be operational by June 2013. The plant represents Leyuan Group's only copper foil production facility and the end of the phased capacity expansion project should see the company's maximum production capability amount to 100,000t/y. Leyuan expects to supply the domestic and Southeast Asian markets with copper foil produced from locally sourced copper cathode. Capital investment for the project is expected to amount to RMB1.22B.
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    Southwire, the US-based aluminium and copper cablemaker, has said that while the use of copper in most electrical applications is unlikely to change, some manufacturers are likely to move toward the use of aluminium wire. The auto industry is increasingly using aluminium wire for traditional copper applications. This is occurring most predominantly outside of the US, however domestic autos companies have also been using aluminium wire for battery cable and aluminium wire harnesses for lights. Southwire stated that for most electrical applications copper usage will remain dominant because of its overall reliability.
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    Guangzhou Jiangtong Copper products, a subsidiary of Jiangxi Copper, announced that it began trial production at its new 400,000t/y copper wirerod plant this week. The company expects to supply nearby consumers in southern China as well as those in foreign markets in Southeast Asia. Capital investment expenditure totalled RMB2.0B.
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Southern Copper strike temporarily delayed - 0 views

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    A strike planned to start on Monday at Southern Copper's Peruvian mine Cuajone has been temporarily suspended pending mediation, officials from the company and union said. Southern, one of the world's largest copper producers, has been hit by strikes this year in Peru as workers demand a larger slice of the country's economic boom. Union leaders had planned to go on strike again because the company had threatened to fire about a dozen workers for participating in recent walkouts. But Roman More, head of the union at Cuajone, said the strike slated for Monday was called off as the company agreed to sit down with workers and the government for talks on Tuesday. Unions from the company's Ilo smelter and Toquepala mine were also expected to participate. "We are going to meet on Tuesday to see if we can reach an agreement about the firings. The meetings were requested by the government," More said. Alberto Giles, the company's human resources director, said the strike plans were scrapped. "In the case of Cuajone ... they suspended the strike plan," he said. "With regards to Ilo, the strike was supposed to start on Wednesday, but I don't think there will be a strike. I think the strike will also be canceled at Ilo." Cuajone, which produced some 148,939 tonnes of copper last year, is Southern's biggest mine in Peru, the world's No. 2 copper producer.
James Wright

Germany - Aurubis' copper products demand outlook: Asian demand will recover after Summ... - 0 views

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    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.
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    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.
Colin Bennett

Southern Copper interested in jv with Anglo American to develop Peru copper project - 0 views

  • Southern Copper Corporation (SCC) is interested in discussing a potential investment with Anglo American in Peru’s Quellaveco copper project, it said recently.
Colin Bennett

Southern Copper Corp: 2010 Copper Output Seen 500,000 Tons - 0 views

  • Southern Copper Corp. ( PCU | Quote | Chart | News | PowerRating) expects to produce about 500,000 metric tons of copper in 2010, following mined output of about 483,376 tons in 2009, a high-level official said. Speaking on a conference call on Tuesday, chief financial officer Genaro Guerrero said the forecast doesn't include any production from the Cananea mine in Mexico, which has been closed due to a labor dispute.
Colin Bennett

Southern Copper optimistic on growing copper demand - 0 views

  • He said that during Q2, global copper demand was up 4.8% QoQ thanks to demand from emerging economies led by China and a recovery in physical consumption in the US and Europe. During the Q2 of this year, US and European demand for fine copper increased by 22% and 4% respectively when compared to the Q1 of this year. These are very positive developments that support our conviction of higher physical demand from now on. In addition, copper production has not grown at the same rate as demand which will further support prices for the red metal. He added that a clear sign of this is the consistent reduction of the combined copper inventories of the London Metal Exchange, COMEX and Shanghai warehouses. At their latest peak in February this year combined inventories were 815,000t." According to Chilean state copper commission Cochilco's weekly report, global stocks stood at 609,478 tonnes.
Colin Bennett

Southern Copper Q4 profit $363.4 million against loss a year ago - 0 views

  • Southern Copper, one of the world's largest copper producers, said it would invest $2.8 billion during the next three years to develop new capacity and that the program would lift annual output by 342,000 tonnes of copper and 6,600 tonnes of molybdenum. Of that investment total, $1.8 billion is earmarked for Peru and $1 billion for Mexico. Some $600 million is scheduled to be spent in Peru during the 2010 fiscal year, while roughly $200 million is tagged for Mexico, the company said. Among the projects Southern Copper said are progressing are its Toquepala expansion and the Tia Maria development in Peru.
Colin Bennett

Financial crisis hits some Peru mining projects - 0 views

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    Like Inca Pacific, Southern Copper Corp, Candente Resources, Strike Resources Ltd and Newmont Mining Corp (NEM.N: Quote, Profile, Research, Stock Buzz) have complained of having to reexamine or delay their projects in Peru because of the global crisis. Southern Copper has said plans for its Los Chancas would be evaluated, and that it may consider dipping into dividends for project funding.
Colin Bennett

Southern Copper CEO Sees Return to $4 Copper on U.S. Demand - 0 views

  • Nov. 4 (Bloomberg) -- Copper prices may rebound to $4 a pound next year because of recovering economic growth in the U.S. and Europe and a lack of new supply, Southern Copper Corp. Chief Executive Officer Oscar Gonzalez Rocha said.
Colin Bennett

Southern to Reach Full Copper Production Next Year - 0 views

  • Southern Copper Corp., which won control this week over its largest mine in Mexico after a three- year strike, expects to reach full production capacity next year, Chief Executive Officer Oscar Gonzalez Rocha said today.
Colin Bennett

Copper production in Zambia on track for 1.5m tonnes in 2017 - 0 views

  • According to The Africa Report new projects due to come on stream include the expansion of the Lumwana mine, Canadian firm First Quantum's $2 billion greenfield Trident project, China Nonferrous Mining Corporation's $832m project and the Lubambe mine – a joint venture by Brazil's Vale, South Africa's African Rainbow Minerals and state-owned ZCCM Investments.
Colin Bennett

Southern Copper 2Q profit falls 24% - 0 views

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    LIMA, Peru -- Peru's Southern Copper Corp. on Thursday said second-quarter \nprofit fell 24 percent from the year-ago period amid strikes and higher fuel and \nproduction costs.
Vivienne Lloyd

Better results for Aurubis despite weakness in semis sales - 0 views

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    Aurubis, the Germany-based copper smelter and semis producer, announced increased operating earnings before tax of €140M (US$188M) in the final quarter of 2012*, compared to €86M in the previous year (US$116M). Despite an improved group level performance, Aurubis noted weaknesses in its copper semis business, saying "sales volumes were down on the previous year due to weak markets." The company attributed the weak sales to poor demand from Southern Europe and a typical seasonal slowdown in Q4, however, the company noted a slightly better environment in North America. In their outlook for the coming year, Aurubis said they expect weak conditions to remain in Europe in the coming months, but expect stronger demand from North America and the Far East. The company said that they are experiencing slower demand for wire used in automotive harnesses but hope that wirerod will replace some of the current weakness. In other semis sectors, Aurubis expects better global demand for flat-rolled products and stronger appetite for copper shapes outside of Europe.
Colin Bennett

Mitsubishi Materials acquires 20% stake in Peruvian copper project - 0 views

  • Japan’s Mitsubishi Materials Corp (MMC) has acquired a 20% stake in AQM Copper's Zafranal project in southern Peru and an additional 20% stake in AQM’s wholly-owned Peruvian subsidiary Minera AQM Copper Peru S.A.C.(MAQM)
Colin Bennett

Xstrata ups Tampakan mineral resource estimate 9% - 0 views

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    "MANILA, Oct 20 (Reuters) - Global miner Xstrata Plc (XTA.L) has boosted an estimate of mineral resources at its $5.2-billion Tampakan copper-gold project in the southern Philippines to 2.4 billion tonnes from 2.2 billion, the firm said on Tuesday."
James Wright

U.S.A. - General Cable reports growth in sales of metal volume of 6% y-o-y and 2% q-o-q... - 0 views

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    General Cable announced that sales in terms of the volume of metals sold increased 6% y-o-y and 2% q-o-q, principally attributed to aluminium-based product shipments for use in aerial transmission projects in Brazil. Discounting the sales for Brazil's aerial transmission projects, growth in shipments to the country still increased by 9% q-o-q and 5% y-o-y. The company benefitted from Brazil and Venezuela's increased spending on electrical infrastructure, Chile's spending on construction and mining activities and also the release of industrial projects in Thailand. Volatility of metals prices contributed to some distributors and copper rod customers deferring purchases, particularly in Zambia and Chile. The company also reported stable demand from North America for electrical infrastructural projects, networking and OEM applications while Europe experienced a sequential rise in shipments of 4%, which was lower than expected due to difficult trading conditions in Southern Europe. However, European sales were buoyed by submarine and land based turnkey cable projects, which accounted for $600M.
Colin Bennett

Prysmian 500kV submarine power cable project in China - 1 views

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    "The new Hainan interconnection comprises four HVAC (High Voltage Alternating Current) 500 kV single core SCFF (self-contained fluid filled) cables to be laid under the Qiongzhou Strait in southern China, along a 32-kilometer route."
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