Bloomberg reported that Mitsubishi Materials Corp, Japan third largest copper smelter will increase production by as much as 17% after its Onahama smelter which shut after the March 11 earthquake resumed operations at full capacity.
Mr Yasunobu Suzuki executive officer at the company sales department said the company expects to boost output to 24,000 tonnes to 25,000 tonnes per month from October to March. The company planned to produce 21,396 tonnes a month from April 1 to September 30.
He said that “We expect some good demand from the auto sector from October and for the construction sector we may see demand to rebuild at the earliest from January.”
He added that the company will give a six-month output plan in early October.
Mr Suzuki said the company will maintain force majeure on concentrate shipments as nearby port facilities haven’t fully recovered, even though Onahama has been running at full capacity since September 3.
He said that of the three piers at Onahama port that the company was using before the disaster, two are partially serviceable, while the third won’t be ready until March 2013. The company can also use the nearby Fujiwara pier in the port and the Shimizu port in Shizuoka prefecture.
An increase in production may further depress prices in London. Copper, used in pipes, tubes and wires has fallen 8.6% this year, touching an eight month low on August 9 on concern that slowing US economy and Europe sovereign-debt crisis may reduce demand for industrial metals. Societe Generale SA global asset allocation team went underweight on commodities, saying the asset class is in the danger zone.”
The International Copper Study Group said on September 7 demands for the metal outstripped production by 246,000 tons last year. The world supply deficit is expected to total 377,000 tons in 2011 and 279,000 tons in 2012.
The smelter, located in Fukushima prefecture resumed partial operations from June 30 after the disaster halted output, damaged the nearby port and drove the company to declare force majeure a legal clause allowing companies to miss deliveries because of circumstances beyond their control.
Mitsubishi Materials reduced output in the April to September period by 22% from 27,342 tons a month in the same period a year earlier. It operates the Onahama smelter with a capacity of 258,000 tons and the Naoshima smelter in western Japan with 225,000 tons.
(Sourced from Bloomberg)
