Copper end use trends

Hubei Environmental Protection Department and Huangshi Environmental Protection Bureau have approved Chinalco Central China Copper Co., Ltd's 135,000t/y copper plate and strip plant. The mill was put into production this year and involved a total estimated investment of RMB1.7B.

Construction of a copper semis project was reported to have commenced in Wuqing District, Tianjin. The project has a planned capacity of 100,000t/y of semi-fabricated copper products and is expected to enter production in 2013. Tianjin Nonferrous Metals Industry Association has invested RMB2.0B.

It was reported that between January and November of 2011 a total of 168.2Mkva of newly built power substation capacity and 28,045km of associated power line was installed. Furthermore, the statistics from China Electricity Council show that power grid investment over the first eleven months of 2011, which totalled RMB311.4B, up by 20.1% y-o-y, outstripped power source investment over the same period, which amounted to RMB309.3B, and grew by 0.5% y-o-y.

Henan Sanfeng Copper Company began producing copper strip and plate at its new facility, which can output up to 50,000t/y. Plans remain to increase capacity to 100,000t/y of copper strip and plate in the second phase expansion of the operation. Total investment into the mill is expected to number RMB1.4B. The plant utilises refined copper as its raw material.

Power cable producer Jiangsu Zhongchao Cable plans to acquire three industry peers through a private placement, reports claim. Zhongchao Cable plans to issue a maximum of 68 million shares at not less than RMB13.43 (US$2.10) per share in order to raise a maximum of RMB900M (US$142.M) to acquire 51% stakes in Yufang Cable, Mingzhu Cable and Xizhou Magnet Wires, and to set up an operations centre in Shanghai. According to the filing, controlling shareholder, Jiangsu Zhongchao Group, plans to spend between RMB100M and RMB300M (US$15.9M and US$47.6M) for the private placement.

It was reported that 95% of a sample of copper wire and cable manufacturers thought that copper orders would decline in January, while 60% agreed that the copper price will hold flat at the same average price into the future. Enterprises are expected to reduce output in January as 95% of those surveyed anticipate a fall in orders due to the Spring Festival holiday (January 22nd-28th). Negative sentiment with regards to the eurozone's economic outlook was also cited as a key reason for expecting limited copper market growth. The survey results come despite recent announcements of positive U.S. and China manufacturing data.

Operations have commenced at Anhui Jingcheng Copper Share Co. Ltd.'s high precision copper plate and strip project. The new facility will manufacture 30,000t/y of material.

With the ongoing volatility of copper pricing creating a major concern for the telecommunications industry as telecoms operators traditionally use copper ground wire for network grounding and bonding, CommScope Inc. has developed a copper-alternative grounding wire designed to deter copper theft and lower maintenance costs for telecoms and data applications.

Koyo Materica, Japan's leading nonferrous metals distributor, announced plans to enter the copper slitting business this winter, which will supply the Japanese automotive sector. A slitter line has been set up by the company in Indonesia.

Japan's shipments of wire and cable reached 58,400t in December 2011, up 2.9% y-o-y. Nevertheless, the figure is down 3.6% from November's shipments of 60,429t. Strong demand came from the recovering automotive industry and an improving construction sector.

Sumitomo Electric Industries Ltd., the Japanese integrated cablemaking company, announced plans to build a new copper wirerod plant in Thailand. The facility will add 17,000t/m of capacity to the company's current 20,000t/m, which is split between rod mills in Japan and Indonesia. Sumitomo intends to supply copper wirerod primarily for downstream processing into automotive wire harnesses and electric motors in order to meet growing demand from the emerging South East Asian car markets.

Aurubis AG's Buffalo, N.Y. copper fabricating business unit (formerly owned by Luvata) announced an increase to the fabrication charges on its rolled product shipments, effective from 1st March. While the exact charge will vary by product, the average fabrication price will rise by 10%. The company has cited the long term rise in supply, maintenance, energy and health-care costs as reasons for the change.

Revere Copper Products Inc., which is based in Rome, N.Y., will increase its fabrication charge on all copper and copper alloy products by an average of 10%, effective as of 1st March. Revere said that the rise in costs related to supply, energy and health-care were attributable for the price hike. It also added that the new revenue will ensure that the company can reinvest in key process centers to improve its quality, service and reliability.

The second phase of Prysmian S.p.a.'s development strategy, which involves the expansion of its Rybinsk facility in Russia, is nearing completion and is expected to begin supplying customers in Q1 2012. After the expansion, the facility will be capable of producing cables for use in the automotive and oil and gas sectors. The initial phase of the plan involved the installation of equipment for the manufacture of cables and systems related to the construction business. A third phase involving high voltage and medium voltage cable manufacturing is also underway and the building to house the new lines is nearly ready. The third phase is expected to be completed at the beginning of 2013.

Three plastic pipe system manufacturers, Pipelife Hungaria, Wavin Hungary and BTH Fitting (Tessenderlo Group), two of them leading European players, are suspected of being part of a price fixing cartel operating in Hungary

La Farga Tub France, a new subsidiary of La Farga Group, the Spanish copper semis fabricator, commissioned a new distribution facility to supply France with the Group's 'La Farga Tub' copper products. The copper piping will be manufactured at the Les Masies de Voltregà plant and will be 100% recyclable and bacteria-free. The products' intended application areas include: Sanitation, refrigeration, climatization, medical and industrial use. La Farga estimates that the annual consumption of copper piping in France is 30,000t.

The Chinese government released its composite manufacturing PMI, which showed improved signs of broad industry growth in January, as the index rose to 50.5 from 50.3 in December. A figure above 50 indicates an expanding industry. The results also indicated variance between sub sectors. The new orders index was 50.6 up from 50.2 in December, however orders for intermediate goods manufacturing and the production of finished goods contracted. The manufacturing export sub sector PMI was down to 46.9 from 48.3 in December, which suggests an ongoing shift from exports to domestic demand. The contraction in exports included the intermediate goods manufacturing and the production of finished goods product sector. The Official China PMI in January is greater than the HSBC China Manufacturing PMI for the same month, which was 48.8. HSBC's PMI was up from 48.7 in December and suggests that the Chinese manufacturing industry is contracting. The HSBC PMI survey includes a greater proportion of smaller companies than the official survey.

The US Department of Commerce concluded that a revocation of the antidumping duty order on brass sheet and strip from Germany would likely lead to a recurrence or continuation of dumping. This follows a 5-year review that was initiated on 1st March 2011. An essential aspect of the results was the calculation of the weighted-average percentage margins for German exporters, which it measured to be 3.81% for Wieland-Werke AG and 7.30% for all others.

Following announcements from Aurubis and Revere about planned rises in their US fabrication charges, Olin Brass Corp. and Hussey Copper Corp. have also unveiled their plans to increase fabrication conversion prices. Olin Brass Corp. intends to increase charges by 5¢/lb on all alloy orders shipped from 1st March. Hussey Copper Corp. will increase charges by up to 10% on its copper products, including sheet, strip, bar and plate on shipments from 1st March. Olin Brass attributed the rise in its prices to escalating inflationary costs related to supplies, maintenance, energy and healthcare. Hussey stated that the charge increases were essential for ensuring continued investment in its equipment, products and people.