Group items tagged

Olin Brass, a division of Global Brass & Copper LLC since Global's $400 million purchase of Olin Corp. in November, is looking to increase product prices in response to rapidly increasing costs and softening demand from end-user markets. The price rises are one aspect of a wider re-organisation by Global in an attempt to offset rising raw material and energy costs. According to the company these initiatives have led to productivity gains of over 10 percent, freeing up significant working capital. However Global comments, "our input costs keep going up at such a rate we simply can't be profitable despite cost savings that we've put in place. We need to receive more for our product." Olin is also being hit by depressed end-user markets. As the slowdown in residential construction activities following the sub-prime mortgage crisis continues, demand in the fabrication sector remains low. The US Department of Commerce reported a 3.3% drop in housing starts in May, with building permits for future construction declining to an annual rate of 969,000. Despite the somewhat bleak outlook the falling dollar against a basket of foreign currencies has lead some copper and brass business that was moved offshore to return to the U.S. lately. "It's not a torrent of products coming back, but whereas in 2001 through 2003 we saw an exodus of business from here to China, this has slowed if not balanced out with some things coming back" according to Olin Brass. Olin brass is a manufacturer and distributor of copper and copper-alloy sheet, strip, plate, foil, and fabricated components in headquartered in Illinois, USA.

Copper and Brass Servicenter Association (CBSA) reported shipments increased by 1.5% month-on-month in July. The association said the increase was a surprise as July shipments historically follow the trend of the previous month. In July, copper and copper alloy shipments decreased by 2.8% year-on-year while average daily shipping rate went down by 7.2%. Total warehouse inventories dropped by 2.8%. The association also said that it is getting more difficult to search for 'positive economic news' as the months go by.

The Japan Copper & Brass Association reported Japanese copper rolled product import fell by 2.5% y-o-y to 50,057t in the fiscal year ending March 2008. While volume of import was still high, it has fallen y-o-y the first time since the fiscal year ending March 2002. Copper tube import decreased by 19% y-o-y to 10,661t, partly due to the slowdown of new housing starts after the Japanese imposed new building standard law. Biggest importers to Japan are reported to be South Korea, China, Germany, Taiwan and North America.

According to the Japan Copper and Brass Association, total production of copper and copper alloy semis fell by 4.1% y-o-y to 72,770t in July. Output also contracted by 0.5% m-o-m in July, a second consecutive monthly decline. The fall is attributed in large part to the struggling automotive sector, which has been strongly impacted by the 11th March disaster.

Production for domestic shipments contracted by 6.6% y-o-y to reach 51,112t, whilst output for export markets fell more rapidly in January, reaching 8,898t after a 23.1% y-o-y decline (this however, was narrower than the December drop in exports of 30.7% y-o-y). Copper strip still represented the most heavily produced brass mill semi-fabricated product (27.7% of overall production in gross weight) but output decreased by 11.3% y-o-y, amounting to 16,600t in January. This was principally attributed to weak interconnector demand, the impact of the flooding in Thailand and the highly appreciated yen affecting the export market. Copper tube output decreased by 14.5% y-o-y to 9,750t in January, on weak demand from air conditioner manufacturers caused by bad weather and a slow world economy. Brass bar production fell by 7.7% y-o-y but rose by 900t since December to reach 14,206t in January. The change was attributed to improving demand from the domestic automotive and plumbing sectors.

The Chinese copper fabricating company, Zhejiang Hailiang said it plans to go ahead with its copper fabrication project in Vietnam despite concerns over the economy there. No investment has yet been made by the company in Vietnam for the $7.2 million project, desgined to produce 71,000 tonnes per year of copper alloy pipe. The development of the plant, still awaiting approval from China's Ministry of Commerce, follows the relocation of the company's existing facility in Zhuji City. Last year Zhejiang Hailiang sold almost 128,000 tonnes of copper pipe and bar generating sales revenue of almost RMB 7 billion ($982 million).

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.

Chinese copper and copper alloy semis production has continued to surge in the first quarter of 2008 according to the Chinese National Bureau of Statistics. Production expanded by 24.6% year-on-year to 1.787 million tonnes compared to 1.432 million tonnes in the same period of 2007. Production in March totalled 643,000 tonnes a 15.9% rise from the 555,000 tonnes of copper semis manufactured in the same month of 2007. Total production last year was 6.626 million tonnes. The latest numbers demonstrate China's growing appetite for both refined and scrap copper even at extremely high price levels. However, recent reports suggest that the rate of growth will moderate in April.

Copper semis production still growing strongly up 25% yoy in Q1 2008

According to CRU's forecasts presented at the 9th World Copper Conference in Santiago, global copper consumption in 2009 is expected to fall by 2 to 3 million tonnes. This represents a 15-20% y-o-y plunge compared with 2008. The severe contraction is attributed to the global economic crisis and the freefall that many industries, such as the automotive sector, have experienced. In the first two months of 2009 total consumption of copper and copper alloy semis declined by 32% y-o-y, while that of copper wire and wirerod fell by 25% y-o-y. In the same period, insulated wire and cable decreased by 30%.

Poongsan Corporation raised its sales targets, backed by strong Chinese demand. The company is expecting to sell some 210,000t of copper and alloy semis this year, compared to an earlier forecast of 205,000t. In addition, the company is expanding capacity in sheet and strip products used in electronics. It was reported that sheet and strip capacity will increase by 22%, to be completed by 2012.

Major Japanese copper semis and wire and cable manufacturers were impacted by the devastating earthquake. It was reported that Hitachi Cable's establishments in Densen, Hidaka, Takasago and Toyoura were affected, while the Minato plant was flooded by a 1.5-metre tsunami. Fujikura's facilities in Sakura, Chiba, which engage in the production of optical materials, were also impacted. Furukawa Electric's Chiba offices, which are located at a landfill, were affected due to soil liquefaction. The company's production equipment at its telecom cable factory experienced damages. Mitsubishi Shindoh, a copper and alloy semis fabricator, saw its plumbing operations partially destroyed. San-Etsu, a brass bar specialist, is shutting down production at its Shin-Nitto plant in Ibaraki, without any significant damages reported whatsoever. Production will be transferred to two other factories.

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.

Anhui Jingcheng Copper Share Co. Ltd. announced on 23rd August that the commissioning of its 30,000t/y high precision copper strip project will be suspended until 31st December 2011. The project was originally intended as a high precision copper alloy operation with a production capacity of 20,000t/y, but in May 2009 plans were revised to develop a 30,000t/y high precision copper strip project at an investment cost of RMB495M.

Hussey Copper Ltd, the Philadelphia-based copper semis fabricator, is rumoured to be up for sale and industry sources said that a deal is likely to be struck imminently. The company has recently been struggling to finance elevated input costs, attributed to high copper prices. In a bid to alleviate cash-flow issues stemming from the higher cost of financing, Hussey firstly reduced its payment terms in January from a 45-day to a 30-day basis. Two months later, the company asked customers to pay for freight charges on orders, which mills' traditionally absorbed into their own costs. Hussey manufactures copper and copper alloy rolled products, rods and electrical bar at two operations located in Leetsdale, PA and Eminence, KY.

Hussey Copper Ltd., the US based manufacturer of copper and copper alloy rolled products, rods and electrical bar, filed for Chapter 11 bankruptcy on 27th September following a liquidity problem attributed to sustained high copper prices. It is also reported that Kataman Metals, a trading firm involved in the primary and secondary copper markets, agreed to purchase assets belonging to the company. Kataman is believed to have supplied materials to Hussey in the past. The sale is expected to take a further 60 to 90 days.

Sindicel, the Brazilian electric conductors and non-ferrous metals association, expects sales of copper and copper alloy wire, cable and semis to rise by 10% y-o-y in 2011. Domestic production is also predicted to increase by 10% y-o-y in the same period. The sector's output and sales has been boosted by demand from the automotive, construction and telecommunications industries. In addition, a poll of Brazilian copper products producers revealed that half were operating above 80% capacity utilisation. Ibram, the national mining association, also reported that wire and cable production will grow by 39% by 2016. This will be primarily driven by the construction industry due to events such as the 2014 World Cup, the 2016 Olympics and also government programs. According to Ibram, Brazilian output of copper products was 230,000t in 2010 and is anticipated to grow to 475,000t by 2014.

Olin Brass Corporation, the US based manufacturer of copper and copper-alloy flat rolled products and fabricated components, said that the top challenges facing brass mills are weak end-use demand, volatile copper prices and overcapacity. The company estimates that the average capacity utilisation rate is just 55-60% in the US. In addition, it expects consumption of copper strip products in the US to total 829Mlbs in 2011, down from 1600Mlbs in 2000.

Wolverine Tube Inc., the U.S. copper tube producer, has filed a joint plan of reorganisation to emerge from Chapter 11 bankruptcy protection. The company intends to sell its Netherlands-based Wolverine Tube Europe BV sales and distribution unit in order to fulfil debt obligations outlined by the plan and caused by volatile copper prices and declining sales revenue. Wolverine Tube Europe BV markets copper and copper alloy tube products that are principally used for heat exchange and cooling applications.