Japan: Copper strip demand faces uncertainty amid slowdown in auto, semiconductor sectors
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Copper strip production in FY2024 is recovering compared to last year, but demand from key sectors like automobiles and semiconductors remains uncertain, making it unclear how much production will improve for the full year. From April to August 2024, copper strip production reached 97,249 tonnes (t), up about 5% from the previous year. In FY2023, prolonged inventory adjustments caused a decline in production. While there has been some recovery this year, major companies remain cautious about demand trends in the second half of the fiscal year.
In May, Mitsubishi Materials Co., Ltd., Japan's largest copper sheet manufacturer, announced a forecast of 147,000 t in copper product sales for this fiscal year. Sales volume for the April to June period was 29,000 t, unchanged from the same time last year. The company expects demand for automotive applications to remain low and general-purpose semiconductor products to stay sluggish.
In August, Kobe Steel revised its sales forecast for the first half of the year from 29,000 t to 28,000 t, and lowered its full-year forecast from 60,000 t to 59,000 t. However, sales for the April to June period rose to 13,000 t, up 1,000 t from the previous year. The company noted that demand for automobiles has been recovering since the second half of FY23 and expects the second half of FY24 to remain stable compared to the first half due to the recovery in Japanese automotive demand.
DOWA Metaltech anticipates an average monthly sales volume of 4,100 t in the first half of FY24 (April to September), a 5% decrease year-on-year. Automotive sales are expected to fall by 10%, while sales for semiconductors and information terminal equipment are projected to rise by 20%. The company will monitor whether automotive production adjustments continue in the second half, and while semiconductor inventory adjustments have ended, a full recovery is yet to be seen.
Opinions on automobile demand this fiscal year remain divided. While inquiries have been strong, some believe the recovery in automotive demand may be delayed due to a recent fraud issue. This delay is partly attributed to stricter inspection processes focusing on quality and efforts to stabilise production volumes.
On the other hand, it has been noted that although the company faced challenges from the quality fraud problem until June, demand for automotive terminals has shown signs of recovery since July, driven by the resurgence in automaker production. According to the Japan Copper Stretching Association, the impact of reduced automobile production is expected to ease in the second half of the year, with global automobile production projected to rise.
For copper strips, which are heavily influenced by automotive production, the outlook remains mixed, with both positive and negative factors currently at play.
Note: This article has been published in accordance with an article exchange agreement between Japan Metal Daily and BigMint.
