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.

Anhui Xinke, the Anhui-based manufacturer of copper wirerod, will put its new 150,000t/y wirerod plant into operation on 1st April, according to a source from the company. The company has invested RMB1.2B (US$191M) in the facility which will operate alongside its existing 35,000t/y facility. The company said that it produced 4,500t of copper wirerod in March, up from 2,500t in February. However, the source said that wirerod trading had slowed down and that it was harder to conclude deals at the moment.

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).

Physical copper consumers, including AmRod Corp., Southwire Co and Encore Wire Corp are setting the stage for another confrontation with the SEC over the controversial approval of JP Morgan's physically-backed copper ETF. In an open letter to the SEC from the group's lawyers, they reiterated claims that the ETF would leave less copper in the market for manufacturers, creating shortages and boosting prices. The group branded the decision from the SEC as "not based on substantial evidence" and "arbitrary and capricious." The consumers also said it was surprising that senior SEC executives met with JP Morgan's head of commodities days before the SEC announced their decision, whilst refusing to meet with representatives of the copper consumers. According to a report from the Financial Times, it is now thought likely that the group of consumers will appeal the SEC decision.

According to Tetsu Takahashi, chairman of the Japan Copper & Brass Association, Japanese production of copper and alloy semi-finished products will total 770,000t in 2012, the lowest level since 2009. However, the association is more positive on the prospects for 2013 suggesting that output could expand by 4%, supported by a weaker yen and more accommodative government policies. The association believes that the new government's efforts to reconstruct areas damaged by the 2011 earthquake, as well as the possibility for a rebound in autos exports to China, should lift the demand for Japanese semis in 2013.

CEF, the Brazilian government controlled development bank, announced on 4th January that it is purchasing a 17.2% stake in smelter and semis producer Paranapanema from the Brazilian development bank BNDES. Paranapanema is primarily involved in the smelting and production of semi-finished copper products for the Brazilian and South American market, including copper tube, wires, bars and strips.

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.

According to data from China Customs, Chinese imports of semi-finished copper products amounted to 51,900t in November, a slight increase from October's 51,000t but down 17.6% y-o-y. Compared to 2011, Chinese January-November semis imports were down 14.7% at 613,400t as the ramp-up in domestic semis production in China reduced the demand for foreign produced semis. China customs also reported that cathode imports rebounded in November to 250,666t, up 8.7% from October.

A survey by the Shanghai Metals Market of 20 major Chinese electric wire and cable producers, with total capacity of 978,000t/y, showed that the average operating rate fell to 76.59% in December, down 2.8 percentage points from November. The survey cited the falling temperatures in Northern China as dampening the demand for electrical wire for use in new infrastructure. The survey also reported that raw materials inventories at Chinese electrical wire producers had increased by 4.24 percentage points from November to 25.12% of production, stating that the fall in copper prices in December had tempted producers to increase stocks.

The SEC has postponed its decision on whether to allow Blackrock to launch a physically backed ETF for two months. The move, which comes just a week after the SEC approved JP Morgan's request for a similar ETF, sees the final decision put off until 22nd February. Copper fabricators are highly opposed to physically-backed copper ETF's saying that such investment vehicles would have a "devastating" effect on the market. The Blackrock ETF, which is expected to be twice the size of the JP Morgan ETF, will hold up to 121,200t of copper cathode as a guarantee against shares in its fund.

According to a press release from the Japanese wire and cable makers association, shipments of wire and cable from Japanese factories increased by 3.1% y-o-y in November.

Brazilian copper and alloy semis manufacturer Termomecanica is planning to invest BRL300M (US$143M) in several new products and production facilities. The plans will see the company develop a new line of tube and rolled products, as well as new brass rebar production facilities in Chile and Argentina. The company said that its current production capacity is 140,000 t/y, and that they are producing about 90,000 tpy, stating that they believe in the expansion of the domestic market and an in increase exports. Termomecanica's industrial facilities include two sites in the city of São Bernardo in the Brazilian state of São Paulo, two distribution centres in São Bernardo and Joinvile. The new expansion will add an additional 7% of capacity to the company's operations.

The Securities and Exchange Commission has approved JPMorgan Chase & Co's plan to launch a physically backed exchange-traded fund for copper in the US. Major end users of copper, including Southwire, Encore Wire, Luvata and AmRod have vigorously opposed the launch of the physically backed ETF. The consumers argue that the removal of 183,000t of copper from the market, 27% of current LME inventories, would have a "devastating" effect on the market by creating tightness in supply. US senator Carl Levin, who is also opposed to the launch of the fund, said that the ETF will "increase copper prices and volatility, and undermine market efforts to produce prices in response to supply and demand by copper users".

A recent survey by the Shanghai Metals Market of 21 major Chinese copper tube producers, with a total capacity of 1.24Mt/y, showed that operating rates in November rebounded to 71.12%, up 9 percentage points from October. The survey suggested that the bounce came as a result of weak production in October, rather than a particularly strong November. The commentary released with the survey stated that inventories of air conditioners, a major end use of copper tube, had declined to a historical low of 6.89M units in November. The survey also revealed that producer's inventories of raw materials had fallen in November to 15.7% of production, down 2.28 percentage points from October.

* Aurubis Group, the large German copper smelter and semis producer, announced on 13th December that its operating earnings before tax for the fiscal year Q4 2011-Q3 2012, had increased to EUR296M from EUR292M the previous year (US$385.5M from US$380.3M). Despite the headline increase in profitability, which was driven by the group's smelting unit, Aurubis reported that profits from "copper products were considerably down on the prior-year level due to weak markets for rod and shapes." Operating profits at the group's semis business fell to EUR10.1M this fiscal year from EUR49.7M the prior year (US$13.2M from US$64.7M), with Aurubis citing "the economic influences of the European debt crisis" as a factor weighing on the demand for copper products. Aurubis reported that copper tube output had fallen by 18% to 646,000t in 2011/2012 from 785,000t in 2010/11, copper continuous cast shapes output had fallen by 17% to 164,000t from 197,000t , whilst the output of flat rolled products fared better with output roughly unchanged at 217,000t.

Yangzhou Baosheng Copper Industry, a large Chinese manufacturer of wire and cable, announced on 12th December that it had placed an order with Germany's SMS Meer for a CONTIROD system to be installed at its plant in Baoying, Jiangsu province. The new system, which has a capacity of 48t/h, will come into action in 2014 and will enable the company to expand its range of products.

According to an annual survey from Antaike, operating rates at Chinese copper fabricators were on average 2.66 percentage points lower in 2012 than in 2011. The sector that saw the largest slow down in utilisation was the copper tube sector, down 7.27 percentage points in 2012, due to low operating rates in air conditioner sector denting the demand for copper tube in China. Wire manufacturers and foil manufacturers were reported to have fared better in 2012, with utilisation rates rising modestly.

Henan-based Golden Dragon Precise Copper Tube (Henan Golden Dragon), the world's largest manufacturer of commercial copper tube, will open a new 30,000t/y high precision copper tube factory in July 2013. Henan Golden Dragon begun production of the facility in May 2012 and have invested a total of RMB 380M (USD60.5M). The factory will produce high precision copper tube.

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.

Preliminary Chinese trade data for November showed that imports of unwrought copper totalled 365,331t in November, up 13 5% m-o-m from October; partially driven by seasonal effects from the week-long Chinese October holiday. Year to date imports of unwrought copper reached 4.31Mt, up 20.8% compared to the first 11 months of 2011. Imports of copper scrap totalled 470,000t in November, up 20.5% from October. Year to date imports of copper scrap also showed increases on the precious year, reaching 4.4Mt, a 4.1% increase on January-November 2011.

A survey of 21 major Chinese wirerod producers, with total capacity of 3.67Mt/y, showed that the average operating rate increased to 74.29% in November, up 5.27 percentage points from October. The survey cited an increased demand for wire from the power generation and construction sectors, as well as a roll off of October's seasonal effects as reasons for the increase. The overall level of utilisation in November 2012 was down 12.51 percentage points from a rate of 86.80% in November 2011. The survey also reported that raw materials inventories at Chinese wirerod producers had decreased to 13.98% of production, stating that most producers are not expecting large increases in the copper price, and with tighter cash flows, prefer to hold smaller inventories.

A recent survey by the Shanghai Metals Market of 20 major Chinese wire and cable producers, with a total capacity of 1.007Mt/y, showed that operating rates in November hit an annual high of 79.37%, up 3.97% m-o-m. The reading showed a strong rebound from October but remains well below levels seen in 2011, when utilisation rates hit a high of 92.10%. The healthiest utilisation rates in the sector were for large producers (> 50,000t/y), whose rate was at 83.31% in November, well above small producers (<20,000t/y), whose reported utilisation rate was just 56.80%. Both large and small producers reported low raw materials stock levels at between 19% and 21% of production.

Freeport McMoRan announced 30th November that it has partially restarted production at its Baywater copper semis plant in New Jersey. The facility, which was damaged during 'superstorm Sandy,' produces copper wire and tube products for the aerospace, transport and communications industries. A spokesperson for the company said "limited quantities of their primary products are being delivered" but the company said it is unclear when full production will resume.

Taihan Electronic Wire Co., South Korea's second largest wire and cable maker, announced on 29th November that it had successfully secured a US$44M contract to supply and install power cables in Saudi Arabia. The deal, which will involve laying 13.4km of 380kv high voltage cable, will provide the power infrastructure connecting Jeddah's international airport to a substation in the northeast of the city. The latest deal adds to the company's strong overseas sales in 2012 which have totalled US$250M, a 20% increase on 2011.