Copper end use trends

Hitachi Cable Ltd., has set out its new medium-term management plan known as the Renewed Plan "BRIDGE" with additional management measures. The company said under the new plan, key measures for business structure reforms included; the consolidation of its domestic sales companies, regional offices and branch offices, with the consolidated company taking operational control of all its existing manufacturing companies; the withdrawal from the optical submarines cable business, restructuring of its telecommunications cable business, review of packaging materials operations and a review of its copper tubes business; consolidations and eliminations of group companies in southeast Asia and consolidation of group companies in Europe and North America by country. This is in addition to a reduction in staff at domestic companies which is expected to involve some 1200 staff. The company will also implement measures to reduce fixed expenses. This includes a review of the company's pension system, an operational review of employee facilities including company dormitories, company housing, etc., and the sale of some of these facilities. The Hitachi Group aims to boost sales in priority target areas as a percentage of net sales from 55% in fiscal 2011 to 65% in fiscal 2016.

Data released by the China Nonferrous Metals Industry Association indicated that China's output of copper semis increased by 5% m-o-m to 935,350t in August. The rise has been linked to increased demand for power generation equipment, wires and cables and AC motors. However, demand is likely to be offset by seasonally weak demand for air conditioning and refrigeration equipment.

Hussey Copper Ltd., the US based manufacturer of copper and copper alloy rolled products, rods and electrical bar, filed for Chapter 11 bankruptcy on 27th September following a liquidity problem attributed to sustained high copper prices. It is also reported that Kataman Metals, a trading firm involved in the primary and secondary copper markets, agreed to purchase assets belonging to the company. Kataman is believed to have supplied materials to Hussey in the past. The sale is expected to take a further 60 to 90 days.

It was reported that KPS Capital Partners (KPS), a private equity firm, acquired United Copper Industries (UCI), the building wire and cable manufacturer for an undisclosed sum. UCI has said that capital backing from KPS will enable the company to develop its product line more quickly and enhance its customer service. In addition, it will allow the company to undergo an aggressive consolidation strategy involving the acquisition of companies that have similar product offerings.

Aurubis AG, a leading integrated supplier of refined copper and copper products, has said that its wirerod sales increased m-o-m in September 2011. Copper cake and billet sales are slightly below anticipated levels and the company said that customers have recently been more cautious and have sought some new financing sources. However, macroeconomic concerns have not affected order numbers.

A proposal was made by the European Union (EU) to force telecoms operators to lower their charges to firms who rent their copper networks. Firms that utilise fibre-optic networks would however be exempt from this regulation. The EU believes fibre-optic to be a worthwhile investment that will dramatically improve European infrastructure in the future.

Fushi Copperweld Inc., a leading manufacturer of copper-clad wire, was granted approval by the Commercial Court of Liege in Belgium to lease a 45,000 square-meter copper tube manufacturing and distribution facility, which would serve as an operational hub for the company in Europe. The plant will produce 5,000-6,000t/y of copper tube and plans are being considered to develop a copper-clad wire production line. During the lease period, Fushi Copperweld will have the option purchase all of the assets for EUR5.8M (US$7.8M).

According to a survey conducted by the Copper and Brass Servicecenter Association, the majority of copper distributors and fabricators hold a pessimistic view of the market. 81% of surveyed service centres and 39% of surveyed suppliers believe that orders in Q4 will remain the same, with 46% and 14% of them, respectively, expecting orders to fall. Furthermore, there is widespread concern over the uncertain future of the copper market in the light of financial turmoil in the US and Europe.

Furukawa Electric Co. Ltd., the Japan-based wire and cable manufacturer, has reached a plea agreement with the U.S. Department of Justice under which it will plead guilty to U.S. antitrust violations and pay a fine of US$200M. Separate felony charges levelled against three Furukawa executive employees involved in the collusion have resulted in a combined total of 45 months in U.S. jail terms. The case relates to the collaborative investigations by Japan, the U.S. and the E.U. following the February 2010 raids by Japanese authorities on Furukawa and its competitors: Fujikura Ltd., Sumitomo Electric Industries and Yazaki Corporation. The companies are suspected of being involved in price-fixing and bid-rigging within the automotive components industry. All of the manufacturers, with the notable exception of Furukawa who avoided penalties through reporting the cartel, were also fined a total of ¥12B (US$150M) in June by the Japan Fair Trade Commission for anti-competitive offences in the domestic automotive wire harness market. However, the total cost in penalties in the U.S. could escalate as the remaining companies undergo court judgements after they decide to either enter plea agreements or wait for a court hearing.

It was reported that state-owned Chongqing Machinery and Electronics Group Ltd., plans to invest RMB1.5B (US$236M) in a 100,000t/y refined copper project, which is expected to come on stream in 2015. The company predominantly specialises in the automotive sector, the rail sector, electrical appliances and machinery.

There have been reports that the Jinchuan Group Ltd. has invested in modernising its 60,000t/y high-precision copper tube production line. The company introduced a 55MN double-action extruder and a 35MN indirect extruder. Similar to many other Chinese copper semis fabricators, Jinchuan is focusing on increasing its output of more technologically advanced products which have greater value added.

Electrical wire and cable manufacturer Eurocable Group announced that it has began production of copper wire at its plant near Zagreb as part of a push for the vertical integration of its business. The company is one of the few manufacturers of electrical wire and cable in Europe to launch in-house production of copper wire from copper cathodes. Eurocable Group's in-house production will fully cover the company's needs for 8 mm copper wires, thus cutting operating costs and making external suppliers redundant. The copper cathodes that will be processed at the Jakovlje site will be procured from companies that are members of the LME. Production will initially focus on meeting only the needs of the Eurocable Group itself.

"Carbon Nanotubes (CNTs) have not yet met commercial expectations from a decade ago, and now hot on its heels is graphene. Graphene is considered a hot candidate for applications such as computers, displays, photovoltaics, and flexible electronics. IDTechEx market forecasts indicate that CNT and graphene transistors may be commercially available in volume from 2015 onwards, according to the new report \"Carbon Nanotubes and Graphene for Electronics Applications 2011-2021\". According to IDTechEx, the biggest opportunity for both materials is in printed and potentially printed electronics, where the value of these devices that partly incorporate these materials will reach over $44 billion in 2021."

"For buyers of plant and machinery who appreciate that the cost of ownership is more significant than the purchase price, energy efficiency is a very important factor. Alistair Rae reports on the European Minimum Energy Performance Standard scheme for electric motors, and highlights some of the most efficient motors currently available."