Copper end use trends

This will provide us with highly efficient microwave power and help us achieve our goal to recover ore from previously mined material that would normally have been discarded. If we can commercialise this technology at scale it will be akin to tapping into a new ore body.

Hi Colin, Do we have a way to access this report?? Regards, Avinash Khemka Copper Alliance

The Japan Copper and Brass Association reported that domestic production of brass mill semis fell by 8.5% y-o-y to reach 64,076t in February. The association also anticipates production of around 67,000t in March, which would represent an 8.3% y-o-y decline for the month and a 6.7% y-o-y contraction in output for FY2011/12. In addition, production in 2012/13 is forecast to rise by 2.4% y-o-y to reach 825,300t of brass mill products.

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.

Mr Kloppers can afford to dislike aluminium; the majority of his profits come from iron ore, oil and coal. But for the rest of the industry, his comments have sparked a debate: after a decade of sub-par profitability, is it still worth investing in aluminium?

Preliminary data from China Customs indicates that imports of copper (comprised of blister, cathode, alloys and semis) to China reached 462,182t in March 2012. This represents a 4.6% fall from 484,569t in February 2012, but a 51.9% increase from 304,299t in March 2011. Q1 2012 imports of copper to China reached 1,360,715t, up 50.5% from 904,002t in Q1 last year. Meanwhile, imports of copper scrap in March 2012 totalled 430,000t, up 7.5% m-o-m and up 10.3% y-o-y, taking Q1 copper scrap imports to 1,060,000t, a 6.4% y-o-y rise.

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.

Wanma Cable recently announced that for the last year its operating income was RMB2.6 billion ($0.4 billion) increasing by 21.32% year-on-year, and net profit attributable to shareholders of listed companies was RMB103.6 million ($16.4 million) increasing 6.39% year-on-year. In product layout, the company consolidated its MV/LV and EHV market positions while establishing a special cable business division to intensify efforts to develop a special cable business. The company has secured a good start in new fields, such as rail transit, power generation, petroleum and petrochemical, wind power and coal mining. Wanma Cable's CEO recently said that the income target of company in this year was RMB3.1 billion ($0.5 billion) increasing by 20% year-on-year, based on the copper price keeping last year's price level. The company completed an investment plan in EHV and MV/LV cable through an IPO raising funds."

Sumiden Hitachi Cable said it forecasts Japanese electric cable makers' shipments of VVF (vinyl insulated vinyl sheathed flat-type) cable will total an average of 4,500-4,700 tonnes per month in copper weight in fiscal 2012 ending in March 2013. This would be an increase of around10%. However, if the reconstruction works in disaster areas affected by the Japanese earthquake were delayed, the monthly shipment forecasts could show a slight fall. Sumiden Hitachi Cable is the largest sales company of building cables and wires in Japan and is jointly controlled by Hitachi Cable, Sumitomo Electric Industries and Tatsuta Electric Wire & Cable. Sumiden Hitachi Cable is the third largest supplier of VVF cable in Japan.

It has been announced that General Cable Corp. acquired Delphia Produtos Eletricos Ltda., a Brazilian automotive parts manufacturer although terms of the deal have not been disclosed.. Delphia manufactures automotive ignition wire harnesses sold into the Brazilian market and reported revenues of about $20 million in 2011. General Cable had net sales of $5.9 billion in 2011. General Cable CEO Gregory Kenny said, "over the past several years, through our expansion strategy and continuous improvement culture we have enhanced our service capabilities in a wide range of transportation and industrial applications for original equipment manufacturers, suppliers and distributors. We are well positioned to further enhance the value proposition to our global customers having achieved another important milestone with the acquisition of Delphia in this significant market in South America." Delphia is located in Sao Bernardo do Campo, Sao Paulo State and will continue to operate as Delphia under the umbrella of General Cable Automotiva Brasil.

Russkaya Mednaya Kompaniya's (RMK) Kyshtym Electrolytic Copper wirerod plant (JSC 'KMEZ') in the Chelyabinsk region is undergoing development and modernisation work, which involved an investment of 144M roubles (US$4.8M) in 2011 and is expected to require at least a further 170M roubles (US$5.6M) in 2012. RMK stated that it will invest 19.0B roubles (US$627M) in the Chelyabinsk region in 2012.

From Nexans' Q1 2012 financial report, we can infer that the European wirerod market was supported by a very strong automotive sector, driven by demand from German premium auto manufacturers, as well as increased infrastructure investment in France and Scandinavia, and a rebounding construction sector in Northern Europe. Demand in Southern Europe, meanwhile, continues to be subdued.

Airen Metals announced plans to develop a 10,000t/y copper wirerod plant in the Shree Khatushyamji Industrial Area in Rajasthan. The project is expected to be commissioned in December 2013.

Assomet, the Italian non-ferrous metals association, released figures indicating that the output of copper and copper alloy semi fabricated products fell by 4.8% y-o-y to 1.1Mt in 2011. Copper semi-fabricated products output fell by 6.7% to 556,100t in 2011, while copper alloy semis production declined by 2.8% to 501,500t. The association noted that there was a sharp deterioration in demand in Q4 2011 as concerns grew about the country's debt.

The Italian association Assomet expects production of copper and copper alloy semis to fall by 2.4% in 2012, to 1.0Mt, mainly attributed to poor end-use demand, worsened by increases to housing and value-added taxes. Orders are erratic and the Italian copper semis production sector is currently operating at 50% capacity utilisation, whereas the copper alloy semis sector is slightly higher at 60%.

A spokesperson for Xstrata expressed the company's expectation of improved copper demand from China in the imminent future at a Latin American investment conference in Sydney on 22nd May. The company expects to see a seasonal uptick in H2 2012 and said that the poor demand in Q1 was in line with its prior expectations. Xstrata intends to invest US$7B in the development of copper deposits over the next three years, increasing its copper output by approximately 60%. This bold move comes at a time when some of the company's rivals, including BHP Billiton and Rio Tinto, are reconsidering their expansion plans over fears of unstable copper demand in the current economic climate.

Copper represents less than 1% of the cost of a PV system installed. Is it really a cost-saving target?