Better Results by Japan Major Rolled Copper Makers in 1H F2010

Japanese major 5 rolled copper makers posted higher operating profit in first half of fiscal 2010 started April than the profit in first half of fiscal 2008. The total operating profit was 7.175 billion yen, which is almost double of 3.657 billion yen in first half of fiscal 2008. They improved the profitability through cost cutting effort along with recovering demand. However, the profit could decrease in the second half year due to slowing demand and higher yen rate while major 3 brass bar makers revised the full year target upward.

The 5 major makers improved the cost structure through across the board effort including manpower reduction and lower investment when the demand plunged through January-March 2009. They also revised the hedge transaction in order to minimize the inventory valuation loss even with lower market price for raw materials.

The recovering demand lifted their profit with the improved cost structure. The demand increased for automobile, semiconductor and digital appliances partly due to subsidiary as a part of stimulus package. Hotter summer also supported the demand for air conditioner application.

Furukawa Electric posted first operating profit in first half of fiscal 2010 in 2 years. Dowa Holdings posted better profit, which was around 97% of the profit in first half of fiscal 2008. San-Etsu Metals’ brass bar and wire sales was 39,568 tonnes, which was higher than 37,676 tonnes in first half of fiscal 2008.

The demand, however, is expected to decrease in second half of fiscal 2010 from the first half. The demand decreases for automobile while the demand for semiconductor decreases for personal computer and flat panel television.

Dowa Holdings revised the full year outlook downward for full year fiscal 2010 while Furukawa Electric kept the outlook. Kitz Corporation revised the outlook downward but the brass bar unit revised the outlook upward.