High Copper Price Suffers Japan Electric Wire Makers

Japanese electric wire makers experience tough period when the copper cost price exceeded 800,000 yen per tonne in June. The industry has to go through the 2-3 months tough time. The makers could be suffered from the lower construction demand after July than expected when electric work suppliers change the procurement style to reduce spot purchase. The construction demand, for which electric wire is used for interior wiring of building, keeps high level for domestic plants of appliances makers and major commercial building. The electric wire makers keep full capacity operation since late May. The construction electric wire shipment is peak in July-November usually. The electric wire makers cannot build inventory preparing for the demand season when they cannot afford to take risk with additional stock due to averaged 800,000 yen of copper cost price. The makers concern if they could meet the higher demand in the peak period. The supply of large diameter electric cable got very tight between autumn and year-start for 2 consecutive years in fiscal 2004 and 2005. However, the demand could slow down after July in the year. The potential lower demand is apparently due to higher materials cost when small sized electric work suppliers reject subcontract with major suppliers including Kandenko. The smaller suppliers cannot afford to purchase when every materials’ prices surged due to higher oil and copper price. Major electric wire makers try to find the demand trend when they have potential loss making risk to make wire for stock with expensive copper.