Copper end use trends

As a result of weak customer demand in the aerospace and electronics/data communications markets in Q1 2009 caused by the global economic downturn, International Wire Group, Inc., a US manufacturer and marketer of wire products, announced that it is idling production at two plants in Jewett City, Connecticut and Littleton, New Hampshire. International Wire Group, Inc. manufactures wire products for other wire suppliers, distributors and OEMs manufacturers. It has 19 facilities across the US, Belgium, France and Italy.

Furukawa Electric Co. Ltd. and Tohoku University Graduate School have jointly introduced a medical application made of copper alloy. This development refers to an apparatus that uses copper shape memory alloy and aims to correct ingrown nails. What the apparatus does is to insert an alloy plate at both sides of the nail correcting its curvature. Tohoku University is currently using the instrument on a pilot basis, however, Furukawa is planning to start selling it within this fiscal year. The company expects to sell a significant volume of the newly developed instrument as about 10 million people in Japan suffer from ingrown nails.

Furukawa Magnet Wire Co. Ltd., a subsidiary of Furukawa Electric Group, announced that it has expanded its facility in Malaysia. Production capacity of its TEX-E, trilayer insulated wire, which is principally used in rechargers for computers and mobile phones, has been doubled. The company expects that demand will increase in China and other emerging markets in the medium to long term. In addition, it was reported that Furukawa Electric increased its stake in Chongqing Changhua Automobile Harness Co. Ltd., the China-based wiring harness assembler, to 65% from its previously held 50% share.

Four major manufacturers of wire and cable are set to increase their level of capital investment in this fiscal year. The companies are expected to make large investments within emerging country markets, which promise growth over the medium to long term. Another area of investment is the field of smartphone components. Sumitomo Electric Industries Ltd., SWCC Showa Holdings Co. Ltd. and Furukawa Electric Co. Ltd. will expand capital investment "significantly", while Fujikura Ltd., will do so only "slightly".

Data provided by the Japanese Electric Wire and Cable Makers' Association shows that the country's wire and cable shipments dropped 18.8% from March and 26.3% to 52,000 tonnes from a year ago. The association also said that it expects Japanese wire and cable consumption, which accounts for 60% of total copper demand, will fall to its lowest in 34 years in FY2009. However, exports to China have been increasing in recent months. Toyota Motor Corp, the world's largest carmaker, said it predicts its vehicle sales to be 1 million less than the previous year.

Data from the Japanese Electric Wire and Cable Makers Association revealed that exports fells by almost 32% m-o-m in July. Wire and cable exports fell 51% y-o-y in July. Predictions for August expect a further fall of 22% y-o-y. The country receiving the largest share of exports from Japan is Qatar, which predominantly imports electrical power cable.

"The EU is considering proposals that could require the upgrade of 15 million buildings across the region by 2020 to reduce their energy use by a fifth, according to a report from Reuters."

"MANILA, Oct 20 (Reuters) - Global miner Xstrata Plc (XTA.L) has boosted an estimate of mineral resources at its $5.2-billion Tampakan copper-gold project in the southern Philippines to 2.4 billion tonnes from 2.2 billion, the firm said on Tuesday."

"BHP warns over sustainability of demand for raw materials BHP Billiton, the miner that sells 19 different commodities from...materials had returned.In its quarterly production report, BHP noted that China, the driver of the rally in metals prices...offset this, such a sequence of events should not be expected, BHP said.It added: "In spite of the low metals inventories in... Oct 22 2009, By William MacNamara in London and Peter Smith in Sydney, Financial Times"

"Anglo's copper production rose 13.4% to 168,500 tons from 148,600 tons."

Nexans published its Q3 2009 sales figures and reported revenues of €1.27 billion (US$1.90 billion) compared to €1.69 billion (US$2.53 billion) in Q3 2008, a decline of 25%. At constant metal prices, sales in Q3 2009 amounted to €988 million (US$1.48 billion), which corresponds to a 19% organic decrease. For the nine months ending September 30 the company reported an organic fall in cable business sales of 17%, based on constant metal prices calculations. This compares with a 16% contraction experienced in H1 2009. Nexans said that lower building cable sales in Europe and Asia-Pacific as well as setbacks in the execution of high voltage contracts affected its sales figures. Energy cable revenues in Q3 were down by 13% y-o-y; those of telecom cables plunged by 19% y-o-y. In line with planned cutbacks in production capacity, electrical wire sales in Q3 were down by 35% y-o-y.

According to data released by the Japanese Electric Wire and Cable Makers' Association, Japanese copper wire and cable offtake in September contracted by 17% y-o-y, the 12th sequential monthly decrease. Shipments in September amounted to an estimated 57,800t, a 14% m-o-m increase. The copper wire and cable sales forecast for FY2009 has been revised down to 648,000t compared to an earlier projection of 705,000t.

The Japan Copper and Brass Association said that copper semis output in Japan fell by 17% y-o-y to 66,145t in September. But from a m-o-m perspective, September rose by 5%, the sixth consecutive monthly improvement. It was reported that even though it was the 14th y-o-y decline, the decrease narrowed supported by the pick up in demand from the semiconductor, automobile and electronics industries. It is expected that demand in FY2009 will amount to 713,930t; that will be the lowest level since FY1975 and will represent an 11% contraction compared with FY2008.

General Cable, the US wire and cable maker, announced that its net income in Q3 2009 amounted to US$16.4 million compared with US$50.5 million in the same period last year. This is a 68% y-o-y plunge. Net sales in Q3 2009 added up to US$1.08 billion, down by 25% y-o-y on a metal adjusted basis. In the same period, operating income plummeted by 59% y-o-y to US$49.4 million. The company expects that in Q4 markets in developing regions will perform relatively better compared with developed regions. This is partly attributed to infrastructure projects and better credit conditions.

"Recently, carbon-free copper smelting technology, a technology with full independent intellectual property rights, has passed expert examination organized by China Nonferrous Metals Industry Association (CNIA) in Dongying, Shandong province. It is the first time zero-carbon emissions in the copper melting process has been realized and also opens a new gate for low-carbon development of China's nonferrous metals industry."