Japan Cu Alloy Re-rollers Struggle for Operation Recovery

Japanese copper and copper alloy re-rollers are trying to increase order receipts for commodity grade while most of them have focused on high value added products such as special alloy products or very thin products in recent years. The re-rollers are suffered from low operating rate due to the demand deterioration for lead frame and other flat products used for electronic devices.

Commodity grade copper and copper alloy flat products are used for general purpose connectors, electric installations and construction applications. It is difficult for the re-rollers to differentiate the commodity products with no specialized features such as thickness or alloy content. Cost competition is severe and profitability is low.

Most of Japanese re-rollers shrunk production of commodity products and increased high value products including lead frames to mount IC chips or plated strips for automotive connectors in recent years.

However, one dealer around Tokyo said major re-rollers are recently focusing on commodity grade products. One major re-roller acknowledged they restarted production of tough pitch copper, brass strip and other commodity grade products since autumn of 2011.

Lead frame shipment significantly decreased for both domestic and offshore markets since autumn of 2011 along with the total sales deterioration of electronic appliances. Some of Japanese re-rollers are forced to idle plant due to slower orders. The re-rollers are trying to raise the operating rate.

The officers of several re-rollers showed a concern that the demand might not recover to the level before autumn of 2011. One major re-roller source also pointed out copper alloy product users are currently not stuck at Japanese products when yen exchange rate stays very high and they sought another supply source under supply chain troubles as of the major earthquake and Thai flood disaster.