Japan's Nippon Mining forecasts 30% decline in copper products output in H1FY24

JX Nippon Mining & Metals anticipates a 27% y-o-y decline in the average monthly production volume of copper and copper products during the first half (April-September'23) of this fiscal year (FY'24). The drop is primarily attributed to sluggish demand in the telecommunications sector, the mainstay of the business.

Heightened uncertainty surrounding the geopolitical situation, especially in Ukraine, and global inflation suggest that recovery might occur after the next fiscal year. However, the company maintains the view that demand will increase in the medium- to long-term due to faster communication speeds and the growing electrification of automobiles.

Production forecasts for major product types in the first half of the year indicate a 20% decrease in phosphor bronze sheet strips (800 t), 25% decrease in rolled copper foil (600 t), 13% decrease in titanium copper strips (130 t), and a substantial 43% decrease in brass strips (170 t).

Telecom-related demand was robust until the first half of the previous fiscal year due to the special demand resulting from the coronavirus pandemic. However, inquiries have weakened since the second half of the previous fiscal during the adjustment period.

The plant operated at full capacity in the first half of the previous fiscal year, resulting in a production volume of 3,300 t of copper and copper products. This included 1,000 t of phosphor bronze strips, 800 t of rolled copper foil, 860 t of Corson alloy sheet strips, 150 t of titanium copper strips, and 300 t of brass strips.

In contrast, the market deterioration during the second half of the previous fiscal year led to a 30% decline in the capacity utilisation rate, resulting in a production volume of 2,300 t of copper products. This comprised 800 t of phosphor bronze strips, 500 t of rolled copper foil, 520 t of Corson alloy plates, 120 t of titanium copper strips, and 200 t of brass strips.

The decrease in production varied based on the inventory situation within the supply chain, with relatively large inventories observed for terminals and connector materials. The reduction in the production volume of brass strips was implemented in preparation for business withdrawal.

This article has been published under an exchange agreement between Japan Metal daily and SteelMint.