Group items tagged

Domestic copper pipe industry is asked to take a strategic restructuring to keep competitiveness while being faced with an important turnaround.

When Southern California Edison unveiled plans to install 250 megawatts' worth of solar panels on warehouse roofs back in March, it was hailed as a ground-breaking move. In one fell swoop, the giant utility would cut the cost of photovoltaic power, expand the solar market and kick-start efforts to transform untold acres of sun-baked commercial roof space into mini-power plants. There's just one problem: the solar industry is fighting the billion-dollar plan. In briefs filed with the California Public Utilities Commission, solar companies, industry trade groups and consumer advocates argue that allowing a utility to own and operate such massive green megawattage will crowd out competitors who can't hope to compete with a project financed by Edison's ratepayers. (In California, shareholders of investor-owned utilities are guaranteed a rate of return for approved projects, while utility customers bear a portion of the costs in the form of higher rates.) The five-year plan "would establish SCE as the monopoly developer of commercial-scale distributed solar in its service territory," wrote Arno Harris, CEO of Recurrent Energy, a San Francisco company that sells solar electricity to commercial customers. "This would irreparably impair the development of a competitive solar industry."

Shenzhen-listed wire and cable producer Qingdao Hanhe Cable Co announced on 27th November that it has won a contract to supply cables to the State Grid Corporation of China as part of a fifth round of contract tendering. The contract, worth RMB81.8M (US$13M), will involve the supplying 220KV cable as well as 20.304 KM of 500V cable. In a separate announcement the company said it was selling its 51% stake in Tianjin Hydraulic Machinery and using the funds to invest in the research and development of competitive products.

GP Autoparts Limited, a subsidiary of the Hong Kong-listed industrial group Gold Peak Industries, announced that it will sell its 50% stake in Shanghai Jinting Automobile Harness Limited to Etern Group for RMB320M (US$50.8M). Shanghai Jinting Automobile Harness Limited produces wiring harnesses for both Chinese and international autos companies. In a statement released by Gold Peak Industries, the company cited increasing competition in the wiring harness sector, as well as the pending expiry of key long term contracts as reasons for the divestment.

Xinxing Zhunguan, a Zhejiang-based manufacturer of copper wirerod, plans to increase production at its facility to 165,000t in 2013, up by 10% from 150,000t in 2012. Despite low profitability at Chinese wirerod producers, an official at the company said Xinxing Zhunguan still plans to increase output in 2013 in order to enhance competitiveness. The company said it expects orders to be subdued in the run up to the Chinese Lunar New Year, but then expects a strong rebound after the holiday period. This is consistent with another report on 11th January from Reuters which cited several Chinese copper traders as expecting the period between now and the holiday to be quiet, followed by a strong rebound.

According to an official from Chinalco Kunming Copper Co., the Chinese wirerod manufacturer, the company produced 10,000t of copper wirerod in March, up from 7,000t in February. The official said that March's output of wirerod had risen because of a week-long shutdown in February for the Chinese New Year. However, output had still fallen short of the company's 13,000t target. Chinalco Kunming plans to produce 150,000t of wirerod in 2013, utilising around 68% of its 220,000t/y capacity. According to a report from Asian Metal, the company has recently settled its long-term charges for processing 8.0mm wirerod at RMB1,150/t (US$183/t).

Wirerod production at Hebei Dawufeng Copper has been temporarily suspended since early April in order to carry out maintenance. The company elected to halt production for a month in order to carry out equipment maintenance, owing to the currently sluggish wirerod market. Production at the plant, which has a wirerod production capacity of 100,000 t/y is scheduled to re-start in early May.

Some Chinese copper producers may be eyeing exports following the removal of a 3% tax on toll-rolled exports in July. In an unprecedented move, some Chinese producers are said to be considering signing export contracts in a bid to stabilise revenues amidst a highly competitive domestic environment. Earlier trade data for September showed a sharp increase in China's export of refined copper, 214,789 tonnes in the first nine months of the year, up 40% from the equivalent figure in 2011.

Nexans reported organic revenue growth of 0.6% to €1.75 billion ($2.3 billion) in all activities in the first quarter, down from 13% growth in the previous year. The group reported strong growth for the first quarter 2012 for copper cables in South America and fibre cables and components in Scandinavia and France. The company did not supply a specific figure for the telecom business, which is now grouped in the transmission, distribution and operators division. Nexans said its operating margin at 30th June should be around 3.5% as a result of competition in underground cables and delays in invoicing high voltage products. At the end of March 2012, net debt came to €566 million ($748.1 million) compared with €222 million ($293.4 million) at the end of December 2011. This increase can mainly be attributed to the acquisition of AmerCable, finalised on 29th February for an enterprise value of €211 million ($278.9 million).

In a meeting held on 7th March, the Korea Copper Industry Cooperative and the Korea Research Society of Copper and Copper Alloy began to draw up a strategy for the development of the local copper industry until 2025. The strategy will look at how to improve the region's competitiveness in the copper semis sector, by coordinating research and development initiatives, looking at the effects of the recently imposed VAT on scrap copper and analyzing the problems associated with facility expansion. The strategy will also aim to publically promote new copper technologies, including products utilising copper's anti-microbial properties.