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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.

According to CRU's Copper Group Manager Vanessa Davidson, annual copper consumption growth will average 4.4% y-o-y during the period 2012-2017 driven by strong consumption in China and the rest of Asia. The Group Manager said she does not see the rising stocks on the LME as being as bearish as it seems, saying it is the result of stocks being transferred into visible locations. The speech was part of the annual CESCO/CRU World Copper Conference held in Santiago, Chile.

""On a fundamental basis, at the moment, the market is still extremely well supplied with material," Matthew Wonnacott, a senior consultant at CRU Group in London, said in a telephone interview. "There's really no reason why anybody should need to withdraw material from an exchange for consumption. Demand in the market is just disappointing this year. It's not just China, in general demand is poor.""

"Copper is losing about 2 percent a year of demand to less costly materials such as aluminum, or about 500,000 tons, London-based researcher CRU estimates. Aluminum is a third the cost of copper and supplies of aluminum in warehouses monitored by the London Metal Exchange are almost 12 times higher."

In an interview ahead of the CESCO/CRU world copper conference, Aurubis AG CEO Peter Willbrandt said that the company's US business is seeing the best flow of orders in 18 months and that the company's order book is full through May. The CEO said that the US has improved more than Europe and that Aurubis is still waiting for a stronger pickup in China, where he believed there had been a 50,000t destock of cathode in the past few weeks. Commenting on price expectations, he said that he expects copper to trade between US$7,500-8,000/t this year.

On October 29th, Japan's Hitachi Cable Ltd announced plans to form a deeper business alliance with Chinese partner Zhongtian Technology Group Co (ZTT). The alliance will see the two companies, which have been joint venture partners since 2000, concentrate on possible tie-ups in the wire and cable sector within China. The announcement forms part of Hitachi Cable's medium term strategy to concentrate on the social infrastructure sector. According to CRU estimates, Hitachi Cable Ltd is the world's 8th largest wire and cable producer. Hitachi Cable projects total sales of USD 5.27bn in 2012/13.

Despite the small drop in March copper imports, overall imports of copper to China remain at a high level. This may seem somewhat surprising in the light of the deeply unfavourable arbitrage, a deteriorating short-term consumption outlook and high inventory levels. CRU suggests that much of the material is imported by traders into bonded warehouses, who may be using copper as a financing mechanism to take advantage of arbitrage opportunities in other markets, such as in the RMB and interest rates. Bonded warehouses allow traders to easily re-export material out of China without incurring major costs, such as VAT. This allows them to take swift aversive action in case the outlook on Chinese consumption weakens further, while benefitting from the export-friendly arbitrage window. The slower growth in scrap imports is more reflective of the negative arbitrage and the temporary easing of the concentrates market following outages at PASAR's Leyte smelter and PPC's Saganoseki smelter.

"Iran's demand for refined copper is small, amounting to just 155kt in 2014. Any easing of trade sanctions is likely to result in a healthy boost to domestic copper demand as the country catches up after its years of isolation. There is also the possible added bonus of increased exports to its neighbours which have wirerod capacity constraints. However, the overall effect on global refined copper demand growth will be limited. "

In the 9th World Copper Conference, organised by CRU in Santiago, Chile, Freeport-McMoRan said that they are 'enormously enthusiastic' about copper's long-term outlook. However, in the short-run, the company waits to see that demand has recovered in most parts of the world, especially in the US market. Confidence will improve when consumers start spending and businesses start investing and employing people.