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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.

The Japan Copper and Brass Association announced on July 25th that Japanese rolled copper output fell 1% to 504,455 tonnes in the first half of this year compared with the same period in 2007. This is the second year in a row that has seen a decline in output. With building activity slow, buyers minimized purchase to avoid price change risk with the fluctuation of copper ingot, leading to the output fall. Copper strip and brass strip saw a 3.4% increase to 137,005 tonnes and 6.5% rise to 67,900 tonnes respectively over the same period due to higher demand from the automobile sector. Brass bar and copper tube output both fell in H1 on prior year. The slow building market saw brass bar output decrease 4.6% to 113,532 tonnes while an increase in offshore production from Japanese air conditioning manufacturers led to an 8.2% decrease in copper tube output to 82,843 tonnes.

Yunnan Copper blamed lower copper prices, high energy and raw materials costs and a 45-day machine overhaul for a 29.5% year-on-year drop in profit, to RMB546 million (US$80 million), in the first six months of the year. "The sluggish economy led to a slowdown in copper consumption, causing a corresponding drop in cathode prices. Meanwhile costs of energy and raw materials increased in the first half year, which also curbed our profits," said the company. These results come in stark contrast to the 35% increase in H1 profit seen at Jiangxi Copper, another big Chinese smelter. Market sources put the difference down to the varying cost of copper production between smelters, as Yunnan's profits fell despite a 21.7% y-o-y increase in cathode output to 875,000t.

DOE announced on September 8 that it will award $6.6 million in competitive grants for 15 state-level projects, nine of which focus on developing policy and regulations to support gigawatt-scale clean energy capacity, and six of which focus on developing advanced building codes. Of these awards, $4 million will go to the gigawatt-scale clean energy capacity projects, which will develop policy and regulatory frameworks that will enable gigawatt-scale clean energy, either through renewable energy or demand-side reductions. Although no cost share was mandated, state partners will contribute up to $1.8 million for these projects. The six advanced building codes projects will receive $2.6 million, which will assist states in developing and implementing residential, commercial, or overarching building codes. Along with its financial assistance, DOE will support these projects with ongoing technical assistance.

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."

Difficulties securing raw materials led to a 0.5% y-o-y drop in output of refined copper, to 320,000t, according to the National Bureau of Statistics of China (NBSC). A downturn in demand coupled with increasing raw materials prices has produced very difficult operating conditions, with one Henan-based trader commenting that, "unless the Shanghai copper price recovers, the fall in Chinese copper output is likely to extend until September." Over the first eight months of 2008, refined copper output increased to 2.47m tonnes, or by 15% on last year. However, some are beginning to question China's ability to sustain the rapid rate of growth it has shown recently, leading to a drop-off in demand.