Japan Copper Rolled Products Makers Improves Profitability in 1H

Japanese 7 major copper rolled products makers posted more consolidated net sales in first half of fiscal 2006 ending March 2007 than the same period of fiscal 2005, while 5 of them gained more consolidated operating profits in 1H of fiscal 2006 from 1H of fiscal 2005. In first quarter to June 2006, only 2 makers could gain more operating profits from April-June 2005. The 5 makers improved their profits in 1H when sales volume increased thanks to demand recovery and they could pass increasing copper price on their selling prices by rolling charge hike and revision of fixed price system. However, 2 makers whose main product is brass bar posted less operating profits in 1H of fiscal 2006 from the same period of fiscal 2005. The 2 makers failed to cover loss in 1Q when they could not pass soaring copper price on their selling prices enough.Copper rolled products demand continued to recover mainly for digital appliances and semiconductor related usages after April-June. Demand also kept high for connector pins used for automotive parts. Then sales volume of copper rolled products increased at the 7 makers in 1H. San-Etsu Metals doubled its operating profit in 1H of fiscal 2006 from the same period of fiscal 2005, whose sales volume of brass bar and wire increased by 14% to 31,458 tonnes in 1H of fiscal 2006 from a year ago. Mitsubishi Shindoh increased sales volume of copper and copper alloy sheet and strip increased by 4.7% in 1H of fiscal 2006 from a year ago and the operating profit increased by more than 40%.Furukawa Electric adopted new price system for copper tube in 1H of fiscal 2006, along which the selling price changes along copper price fluctuation, from fixed price system. The firm improved operating margin by around 2 percentage points from 1Q as a result. Brass bar makers raised their rolling charges by 10-15 yen per kilogram in 1H of fiscal 2006 when copper price jumped up. They could improve their profitability compared with 1Q thanks to the hike and copper price stability after July.