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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.

KME Group, a European producer of copper rolled products and tubes, announced that company revenues (excluding the cost of raw materials) declined by 11% y-o-y to reach €376M. KME mainly attributes the decline to weak macroeconomic conditions caused by the European sovereign debt crisis which began in H2 2011. Copper price volatility has also led to cautious buying of copper products. The company said that it experienced a continued downturn in sales within the industrial sector (approximately 75% of revenue) in Italy and Spain in H1 2012, while France held-up better. Sales contracted period-on-period and year-on-year in the brass rods segment and in rolled products for the construction market. In addition, shipments to domestic appliance and air conditioner manufacturers were stagnant y-o-y in H1. A bright spot was seen in sales of automotive and mechanical components as well as products associated with the electrical industry.

Official data from the Ministry of Industry and Information Technology revealed that major electronic information manufacturing company profits declined by 14% y-o-y, reaching RMB122B in H1 2012. The decline in profits was attributed to weakening orders caused by the European debt crisis and slowing world economy. The number of electronic manufacturers reporting a loss over H1 2012 rose by 20.2% y-o-y, to reach 4,250, which is thought to be as a result of high financing costs.

According to a survey performed by Antaike, the mining and metals information provider, average operating rates of facilities in China producing copper flat rolled products fell to 55.8%, down by 3.4% m-o-m in October. The reduction in plant utilisation has been attributed to weak end-use demand from the domestic electronics and automotive sectors since the end of H1 2011, as well as decreasing export orders. Additionally, the volatile copper price is thought to have led to production cuts at copper plate, sheet, strip and foil fabrication plants. The survey also indicated that 50% of the 22 manufacturers sampled believe that demand will continue to decline and 40% think that it will not grow in the short term. Companies cited decreased buying associated with the Christmas and New Year holidays and shrinking exports of end-use products such as electronics and home appliances due to uncertainty stemming from the European debt crisis.

Assomet, Italy's non-ferrous metals association, reported that domestic production of copper and copper alloy semi-finished products contracted 5.4% y-o-y in 2011 to reach a total yearly output of 1.051M tonnes. This was attributed to metal price volatility impacting clients' procurement activity in addition to substitution losses, which continues because of the ongoing European debt crisis and its implications upon consumers' price sensitivity. Assomet also added that pure copper metal products have and will be more negatively impacted than copper alloy semis due to a higher copper intensity. This led to a drop of about 8% y-o-y in copper semis output this year, reaching 549,000t and production is expected to fall by 3% y-o-y in 2012. Whereas copper alloy semis output declined by 3% in 2011, reaching 502,000t. Production is anticipated to hold at the same level in 2012.

Wood Mackenzie predicts that overall European copper demand will decline by 5% in 2012 to reach 4Mt. This is attributed to weak economic growth together with a prolonged debt crisis.

Southwire Co. Inc., a US cablemaker with a focus on building wire production, said that the US residential construction industry has bottomed-out after near-continuous contraction since being heavily impacted by the global economic crisis in late-2008. The company said that it is now necessary to use statistics on housing area under construction in order to analyse and pre-empt demand as government figures on housing starts cause an overestimation of the strength of the recovery in wire and cable demand. This is due to homebuilders more frequently electing to construct smaller homes, requiring less wire and cable than average-sized homes.

Demand impact

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.

Companies operating in Indonesia have criticised the government over power cuts and Jakarta's attempts to deal with them, including an edict forcing factories to move production to weekends from next week.

For the past two years, the US has been promoting GNEP as a way of meeting the developing world's burgeoning appetite for energy.