Japan Copper, Alloy Output May Fall to 34-Year Low

By Jae Hur and Yasumasa Song

Sept. 25 (Bloomberg) -- Japan’s output of copper and copper alloy fabricated products may decline by 11.5 percent this fiscal year to the lowest in 34 years, according to the Japan Copper and Brass Association.

Production for the year that began in April is forecast to drop to 713,930 metric tons from 806,999 tons the previous year, the association said today, citing preliminary data. That would be the lowest level since 1975, when the country produced 574,000 tons. Output dropped 21 percent to 55,700 tons in August from a year earlier, the smallest decline since November, the data showed.

Japan’s exporters are in danger of being left behind by a global trade recovery as a change in government ushers in a tolerance for exchange-rate gains that threaten to erode profits. Exports fell 36 percent in August from a year earlier, the Finance Ministry said yesterday, an 11th straight decline.

Production of cars, electronics and semiconductors, the key users of copper and copper alloy products, hit bottom in the first quarter amid the economic slowdown, said Keizo Tani, research section manager at the association.

“However, the industry is experiencing a V-shaped recovery in demand, especially for hybrid and electric cars, since April, thanks to the government’s economic measures,” he said.

Yen High

A recovery in exports helped Japan’s economy grow for the first time in more than a year in the second quarter, ending the country’s worst postwar recession. Japan’s currency jumped to a seven-month high last week after Finance Minister Hirohisa Fujii, whose Democratic Party of Japan won elections promising to boost consumers’ purchasing power, said he didn’t support a weak yen.

The country’s copper wire and cable shipments may drop 15 percent this fiscal year to the lowest level in 38 years on slumping demand from construction companies and electric- machinery makers, according to the Japanese Electric Wire and Cable Makers’ Association.

Shipments, which include exports and domestic business, may decline to 648,000 metric tons in the year started April 1, the industry group said on Sept. 17. That compared with a March forecast of 705,000 tons and would be the lowest since the year that began April 1971, the group said.

To contact the reporters on this story: Jae Hur in Tokyo at jhur1@bloomberg.net; Yasumasa Song in Tokyo at ysong9@bloomberg.net