Mitsui Sumitomo Metal Mining Brass & Copper Plans High Operation in 2H

Mitsui Sumitomo Metal Mining Brass & Copper, Japanese major brass and copper sheet and strip maker headed in Saitama Prefecture, raised its output plan for the second half of fiscal 2011 (October 2011-March 2012) by about 10% to average 5,580 tonnes per month from the previous plan. Orders are sharply increasing mainly from automobile industry as a rebound of weak first half year. The company’s order receipt volume is currently exceeding actual output volume. Strong demand condition is expected to continue within fiscal 2011.

Demand for automotive connector and connector pin almost halved in June and July while sharply upturned in and after late August along with automakers’ output recovery. Mitsui Sumitomo Metal Mining Brass & Copper’s order acceptance for this-year delivery is 20-30% higher than the usual level. In October-November, the company’s production is likely to total 5,700 tonnes at the head plant in Saitama and the other plant in Mie Prefecture.

Meanwhile, the demand recovery is slow from consumer electronics industry such for personal computers and cellular phones. Automakers might lower their productions for October-March if yen exchange rate maintains extremely strong against US dollar. The company is cautious about the market situation for January-March.

The current order receipt is higher than the company’s output level. The company’s product and intermediate product inventories have gradually decreased since July-September. The company is likely to have order backlogs and the completion would be the end of fiscal 2011. Moreover, demand for phosphorus deoxidized copper strip seasonally increases in the second half year. Thus the company raised its second-half-year output plan by 9.4% from previously planned 5,100 tonnes per month.

The fist-half-year production was average 5,250 tonnes per month. The demand temporarily weakened in summer while there were speculative order increase just after the Japan Earthquake and the order volume upturned in September. The six-month production was 1.6% lower than the initial plan.