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The Rio de Janeiro State Government has introduced a tax incentive plan to initiate and promote the growth of the downstream copper industry. A reduction in the VAT on copper products from 19% to 2% (only eligible for companies investing over R$40M) has already led to a decision by Ibrame, the Brazilian manufacturer of copper cathode, wirerod, bar and other products, to construct a copper rod mill in Itatiaia. Upon commissioning in early 2013 the facility is initially expected to produce 70,000t/y of wirerod, processed mainly from direct-use scrap, with capacity rising to 100,000t/y in subsequent years.

Mueller Industries Inc., the largest copper alloy rod, bar and section and copper tube producer in the US, expressed interest in expanding their production facilities as well as diversifying their product range. Mueller has placed a preliminary non-binding bid letter for the 100% purchase of unnamed copper producing assets based in Reading, Pennsylvania, owned by Industrias Unidas SA de CV and its subsidiary, United Copper Industries Inc. (UCI). Mueller has allocated US$35-50M in cash for the purchase. The company has also expressed interest in buying an electrical building wire manufacturing facility in Denton, Texas.

Industry insiders have revealed that the first stage of Tianjin North China Cable Company's 220,000t/y copper rod project is currently undergoing trial production. The second stage of the project will entail the installation of an Italian CCR production line which will add a further 100,000t/y of production capacity. In addition, the second stage will also involve the installation of a new wiredrawing production line and a production line of electrolytic copper. The total investment required for the realisation of the project is estimated at around US$156M.

Eastern Copper, a copper wirerod producer based in Shandong Province, announced that it has recently commissioned its second continuous copper wire rod plant. The plant will be able to produce 320,000t/y of high quality copper wirerod at full capacity.

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.

It was reported that Steel Dynamics Inc., the US based semis fabricator, has begun construction of its new US$39M copper wirerod manufacturing facility in Indiana, US. The company expects the plant, which marks its entry into the copper wirerod market, to have a production capacity of 180Mlbs/y and to commence operations in Q2 2012. The facility is owned by SDI LaFarga LLC, a JV between Steel Dynamics and LaFarga Group who hold stocks of 55% and 45% respectively. Indiana is a notable location within the US wirerod market as it is home to consumers, Rea Magnet Wire Co. Inc. and CerroWire LLC.

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.

Wuxi Lineo Science and Technology Group began construction of a 60,000t/y copper wirerod mill in Wuxi City, Jiangsu province. Start-up is expected to take place by October 2012. The company will also invest in a second phase expansion project that will involve the addition of another 60,000t/y wirerod production line by November 2014. The plant will be primarily fed with refined copper cathode sourced from Tongling Nonferrous Metals in Anhui province and is designed to serve wirerod to domestic wire and cable producers unless market prices become sufficiently attractive to allow for export. Wuxi Lineo Group is a private enterprise with downstream manufacturing subsidiaries producing cable, hardware, mechanical and electrical products.

Sumitomo Electric Industries Ltd., the Japanese integrated cablemaking company, announced plans to build a new copper wirerod plant in Thailand. The facility will add 17,000t/m of capacity to the company's current 20,000t/m, which is split between rod mills in Japan and Indonesia. Sumitomo intends to supply copper wirerod primarily for downstream processing into automotive wire harnesses and electric motors in order to meet growing demand from the emerging South East Asian car markets.

Japan Metal Daily has reported that Furukawa Electric has introduced a 500t/y copper wirerod production line at its subsidiary, Shenyang Furukawa Cable in China. The wirerod is used to produce conductors, which were previously purchased from outside the company. The development of the production line is part of Furukawa's move to shift more production in-house.

An SCR-type casting and rolling facility for the production of copper wire rod is to be introduced at Nippon Mining & Metals' Chinese JV. Due to start in August and complete in 2010, the facility will expand output capacity by 50% to 300,000 tonnes per year with ¥3 billion capital expenditure. The JV, Chang Zhou Jin Yuan, will cease its current Contirod-type facility when the SCR-facility comes on line. Nippon decided to undertake the capacity expansion to meet strong demand from infrastructure construction in China.

On August 19th, Chinalco began work on its 300 ktpa copper semis facility in Kunming, Yunnan Province. The company's three existing processing sites, Chinalco Luoyang Copper, Chinalco Shanghai Copper and Chinalco Daye Copper Sheet & Strip, account for around 28% of China's total copper sheet and strip capacity, with a combined total of 130 ktpa, and 220 ktpa of expansions under construction. The new facility, with total investment of RMB2 billion, will comprise a 100 ktpa sheet and strip facility and a 200 ktpa wire and rod facility.

Many Japanese scrap dealers have reduced their shipments to copper alloy fabricators by more than 20% in October due to falling demand. Copper fabricators have decreased their scrap purchasing volumes because of weaker semis output. A number of brass bar makers decreased their buying volume of brass turning scrap by more than 30% in October. From the supply side, copper scrap generation has been tight. Scrap availability has been falling since July and that has triggered competition between scrap dealers to maintain adequate levels of inventory, which resulted in a spike in the market price in September.

The Nizhni Novgorod Copper Company will invest around RUB800M (US$32M) in a copper wirerod plant in Dzerzhinsk, in the Nizhni Novgorod region of Russia. The plant is expected to have an annual capacity of 25,000t/y, and will use 26,000t/y of copper scrap. Commissioning is expected in late 2010.

The US Copper and Brass Fabricators Council has reported a 15.7% m-o-m increase in the US brass mill products trade deficit, taking net imports to 19.9Mlbs in March 2011. The principal suppliers to the US were Germany and South Korea, whereas most US shipments were to Canada, Mexico and China. The segment which saw the largest increase in trade deficit was flat rolled products which reached 6.5Mlbs in March, up from 3.8Mlbs in the previous month. In addition, the trade deficit of rods, bars and sections rose, whereas tube as well as alloy wire both experienced greater monthly gains in exports compared to imports.

Aurubis AG, a leading producer of unwrought copper and copper semis, announced its third quarter results. It reported pre-tax profits to have risen by 41% y-o-y to €111M and total net revenues of €3.294B, up by 32% y-o-y. The company produced 198,000t of copper wirerod, down by 6% y-o-y, whereas production of copper shapes was up by 10% y-o-y, amounting to 55,000t. Within this area, Aurubis' product mix is characterised by an increasing proportion of speciality products. The company noted cooling demand for its copper products during April to June 2011, attributed to seasonal factors.

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.