Japan Nonferrous Metal Production Expected Stable in 2H

Japanese major 6 nonferrous metal smelters’ electrolytic copper output plan for the second half of fiscal 2008 (Oct08-Mar09) is lower by 2.1% than the corresponding period of F2007, according to their announcement. The output would be almost as much as 2H of F2007 excluding the effect of a regular maintenance at Mitsubishi Materials’ Naoshima smelter, Kagawa, Japan. The output seems not to be impacted by lowering ore grade. Lead and zinc outputs by major 8 smelters could also increase year-on-year. Japanese nonferrous metal production is expected to be stable in 2H.

Pan Pacific Copper, a joint smelter between Nippon Mining & Metals and Mitsui Mining & Smelting, plans to increase the electrolytic copper output by 2.5% in 2H of F2008 compared with the same period of F2007. Pan Pacific Copper intends to keep the production level despite of lowering ore grade by raising the secondary material ratio such as low grade copper scrap and anode copper. Mitsubishi Materials also increases the consumption of secondary copper materials.

Sumitomo Metal Mining’s electrolytic copper production decreased by 15% year-on-year in 1H of F2008 due to low ore grade. The firm plans 215,000-tonne production in 2H as much as originally planned in April 2008. The firm implemented facility improvement at Toyo smelter, Ehime, Japan during 1H, such as the upgrade of an ore carrying machine, in order to keep productivity with low grade ore.

Japanese major smelters’ lead production would increase slightly in 2H from a year earlier. DOWA Holdings plans to increase the output by 17% year-on-year. The firm launched commercial operation of a new lead recycling furnace at Kosaka smelter, Akita, Japan in April, though the firm had produced electrolytic lead ingot with a flash furnace in Kosaka. Domestic supply of used battery maintains tight, a main recycling material for lead.

The major smelters’ zinc production would increase by 2.2% year-on-year in 2H. Toho Zinc continues full production while Mitsui Mining & Smelting expanded output capacity at Hikoshima smelter, Yamaguchi, Japan. Mitsui Mining & Smelting plans to increase the zinc output by 1.9% in 2H from a year earlier.

As to electrolytic nickel, Sumitomo Metal Mining plans full production in 2H.

However, the smelters may revise down the output plans for 2H if demand for nonferrous metals becomes worse. Construction and automobile industries are remarkably damaged by global economy slowdown.