Copper end use trends

Yazaki Corp., the Japan-based cablemaker, has implemented plans to begin exporting low voltage XLPE cables from Japan to Thailand beginning in February for a duration of two to three months. This comes as a result of increased demand from Thailand's industrial sector, as factory owners look to repair, rebuild or relocate water-damaged factories. Yazaki has a local production subsidiary for power cables called Thai-Yazaki Electric Wire, but Thai-Yazaki cannot meet the current strong demand independently. Yazaki's two building wire plants in Japan are currently in full production (including Saturdays) and those cables which are ready for shipment are undergoing final checks to ensure that they meet Thailand's electrical standards.

Production of copper wirerod at Kyshtym Copper Plant (JSC 'KMEZ'), Chelyabinsk region, Russia, increased by 57% y-o-y to reach 99,000t in 2011. The plant is majority owned by Russkaya Mednaya Kompaniya (RMK). Output of copper cathode at the facility also rose by 2% y-o-y to reach 115,600t. The plant 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.

The battery technology for plug-in HEVs and EVs (both fixed and removable) has evolved tremendously over the last decade with the introduction of lithium-based batteries complementing lead-, nickel- and sodium-based technologies. These technologies will all continue to have a significant impact on electro-mobility as they may give cost and/or performance advantages for specific applications, for example as start-stop and hybrid solutions. The selection of a technology depends on the requirements for performance, life and cost for a given application. Given the diversity of possible operating modes, there is no one battery system or technology that covers the entire range of application needs sufficiently. On the contrary, different battery energy storage technologies exist and each of them has a role to play in the future as the best solution to the needs of a system depending on their specific attributes: * Lead-based: for start-stop micro application, up to mild HEVs * Nickel-based: for HEV applications only * Lithium-based: for HEV, plug-in HEV and full EVs * Sodium-based: for Plug-in HEV and full EVs

Anhui Jingcheng Copper announced that is has commissioned its high precision copper plate and strip operation. The plant will produce 30,000t/y of material.

It was reported that the construction of North Hua'an Industry Group's copper semis production line has been completed. The production line is currently undergoing pre-production testing. The operation is expected to be commissioned in March 2012 and will produce 6,000t/y of copper and copper alloy wires, tubes, bars and sections.

Leoni AG, a specialist wire and cable producer for the automotive sector, has refuted rumours of plans to relocate its operations from the Bizerte region of Tunisia to Morocco.

Japan Metal Daily has reported that Furukawa Electric has introduced a 500t/y copper wirerod production line at its subsidiary, Shenyang Furukawa Cable in China. The wirerod is used to produce conductors, which were previously purchased from outside the company. The development of the production line is part of Furukawa's move to shift more production in-house.

Norsk Hydro, a Norwegian aluminium semis fabricator, has entered into agreement with Konveyor, another aluminium semis producer based in Turkey, to manufacture heat-transfer products that would utilise aluminium in substitution for copper. Norsk Hydro intends to supply precision-drawn aluminium tubes from its Danish Tonder plant to Konveyor, which will subsequently convert them into specialist capillary tubing using advanced manufacturing technologies. The finished products will be used in heating, ventilation, refrigeration and air conditioning equipment.

It was reported that US State authorities have signed an agreement with China headquartered Golden Dragon Precise Copper Tube Group Inc. for the construction of a new copper tube plant in Wilcox County, Alabama. Development of the facility will involve an investment of US$100M, however, the production capacity of the operation is not yet known. This follows September news that the company had not broken ground at its proposed US$100M, 45,000t/y copper pipe and tube project in neighbouring Clarke County, Alabama. The delay was attributed to a larger than originally anticipated site requirement, leading to the development of new plans to relocate the facility. Production will supply the US heating, ventilation, refrigeration and air conditioning sector.

It was reported that US State authorities have signed an agreement with China headquartered Golden Dragon Precise Copper Tube Group Inc. for the construction of a new copper tube plant in Wilcox County, Alabama. Development of the facility will involve an investment of US$100M, however, the production capacity of the operation is not yet known. This follows September news that the company had not broken ground at its proposed US$100M, 45,000t/y copper pipe and tube project in neighbouring Clarke County, Alabama. The delay was attributed to a larger than originally anticipated site requirement, leading to the development of new plans to relocate the facility. Production will supply the US heating, ventilation, refrigeration and air conditioning sector.

Prysmian Group, the industry leading cable and systems provider, won a contract worth a record-breaking €800M for the development of a high voltage DC submarine power transmission link between Scotland and England. The project will involve the use of at least 400km of a new Prysmian-developed cable product called Mass Impregnated PPL cables, which utilises new material technology to operate with a record longhaul wiring voltage rating of 600kV. This means that energy losses will be kept to a minimum, resulting in a low CO2 footprint for the supply of Scotland-sourced renewable energy for England and vice-versa (the link will be bidirectional). Commissioning is expected in late 2015.

Copper theft has become such an issue that the U.S. Department of Homeland Security issued a warning stating that copper theft is a threat to critical homeland infrastructure. In a 2009 survey published by the Electrical Safety Foundation International, utilities in the United States reported approximately $60 million in losses and 450,000 minutes of outage time annually because of copper theft.

Furukawa Electric announced that it will commission a new electrolytic copper foil factory, located in Taiwan, two months ahead of schedule, in July 2012. The facility is designed to produce copper foil suitable for the manufacture of lithium ion batteries. Furukawa decided to offshore the foil production capacity last year because the appreciated yen had been limiting its competitiveness in supplying the high growth automotive lithium-ion battery market in Taiwan. The company expects to halve its electricity costs in Taiwan, which represent 30% of the total cost of electrolytic foil production in Japan. Furthermore, it is feared that these costs in Japan are likely to escalate with the ongoing strain on power generation and transmission suppliers. This was caused by the continuing temporary closure of nuclear power facilities as it reviews its position on the use of nuclear power generation.

Mueller Industries Inc., the US based copper tube and fittings manufacturer, announced its end of year 2011 results, reporting net sales of US$491M in Q4 2011, down from US$527M in Q4 2010. The company attributed US$11M of the diffrence in net sales between Q4 2011 and the previous year period to a decline in the copper price. US$25M of the difference was attributed to lower unit shipment volumes, of which, the plumbing and refrigeration sectors accounted for US$14M. The company is optimistic that new housing starts will continue to rise through 2012, boosting copper tube demand.

Mueller Industries, a leading producer of copper tubes and brass products, reported net sales of $594.1M in Q2 2012. After accounting for changes of metals prices, this represents a decline of 1% y-o-y. The contraction was partially offset by a slightly higher sales volume y-o-y.

Mueller Inc, the US-based manufacturer of plumbing and commercial copper tube, announced on 5th February that its operating revenue for the fourth quarter of 2012 increased by 27.1% y-o-y, to USD16.4M, compared to the same period in 2011. CEO Greg Christopher said that the company is heavily dependent on the housing and commercial construction sector, and after five years of decline and stagnation," the industry finally appears to be gaining positive momentum."

TEPCO, a Japanese power supplier announced that it will increase its electricity prices for corporate clients by an average of 17% to cover higher energy costs for the use of thermal power plants while the firm idles many of its nuclear power facilities. The Japan Copper and Brass Association diapproves of the move, which it says would add ¥1.2 - 1.3B/y in production costs at the affected brass mills. The 23 copper product fabrication sites within the TEPCO supply area account for 43% of total copper semis output in Japan.

Furukawa Electric supplies an aluminum harness for rear door

The German copper cathode and semis fabricator, Aurubis, has reported its concerns over the Federal Government's decision to phase out nuclear power. Aurubis said that the new legislative package, which involves the decommissioning of seven base load power plants, does not ensure that electricity will remain secure and affordable for the company. As such, it believes that power supply now represents a significant downside risk to its operations. In the event of a momentary power failure, the company would suffer a half-day cathode production loss. A sustained power shortage or blackout could cause substantial damage to plant equipment as liquid melts solidify. Aurubis said that steps were required to be taken to expand the power grid and increase power plant capacities. The company currently uses 1Bn KWh/y, approximately the same amount as 600,000 inhabitants.

It was announced on 22nd February that Fujikura Ltd. commissioned an automotive wiring harness plant in Morocco. The plant will supply low-end European vehicles.

It was reported that OmniSource Corp., a subsidiary of Steel Dynamics Inc., began purchasing No. 2 copper scrap ahead of the commissioning of the SDI LaFarga copper rod project in New Haven, Indiana in Q2. The facility is currently undergoing quality testing. By the end of 2012, the it is expected that the plant will be operating at 70% of its 82,000t/y capacity.

Copper semis output reached 10.28Mt in 2011 according to recently released data by the China Nonferrous Metals Industry Association. The figure represents 4.37% y-o-y growth, which is significantly lower than the 12.76% y-o-y growth experienced in 2010.