High Copper Price Suffers Japan Rolled Copper Makers

Higher copper ingot price suffers profitability for some of Japanese rolled copper makers. Metal Fabrication unit of Nippon Mining & Metals and Mitsubishi Shindoh posted higher profit for April-June from same period of 2005 while other 4 major makers reported lower profit when higher copper price increased the production loss more than expected. They are also suffered from lower margin due to the fixed selling price mechanism.

Copper rolling unit of KITZ Corporation posted 2.5 times of sales for the quarter from same period of 2005 and other firms also posted higher sales under higher copper price and higher sales volume under economy growth. The economy grows in various industries after adjustment in semiconductor and digital appliances. Firm activity by automobile industry also helped to cancel negative impact from higher copper price.

The rolled copper makers reported mixed results depending on the production items. Metal Fabrication unit of Nippon Mining & Metals and Mitsubishi Shindoh, which produce alloyed copper strip and phosphor bronze sheet and strip posted higher profit for April-June from same period of 2005 while other 4 firms, which produce brass bar and copper tube, posted lower profit.

The production loss expansion suffered the profitability for rolled copper makers under surging copper price. The production loss has fixed into rolling margin for long years. With extra higher copper price, the gap between assumed loss and actual loss expanded. Especially makers of brass bar, of which rolling margin is lower than alloyed copper strip and phosphor bronze sheet and strip, were damaged. Some products with a month time lag to cover higher copper ingot price also suffered the makers.

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