Sumiden Hitachi Cable Plans Flat Building Wire Sales in 2H

Sumiden Hitachi Cable, Japanese largest joint sales company of building wire controlled by Hitachi Cable, Sumitomo Electric Industries and Tatsuta Electric Wire & Cable, estimates its sales volume in the second half of fiscal 2010 ending March 2011 as flat as in the same period of fiscal 2009. The firm forecasts Japanese total demand for major 3 building wire items, including low voltage XLPE cable, at average 13,700 tonnes of copper per month in second half of fiscal 2010, down by 1.8% from the same period of fiscal 2009. The demand seemed to hit bottom but the volume recovery is weak with few large-scale construction projects.

Sumiden Hitachi Cable explained Japanese total demand for major 3 items was average 13,150 tonnes of copper per month in first half of fiscal 2010, down by 4.5% from the same period of fiscal 2009 and the company’s shipment volume decreased by 3%. In second half of fiscal 2010, the company estimates the 6-month shipment volume keeps as flat as in second half of fiscal 2009. In October and November, the actual demand was better than the company’s forecast and the company’s shipment volume represented 10% increase more than expected.

However, domestic market of building wire has shrunk by 15-20% compared with the pre-shock level. The demand recovery is still weak. In January-March, market demand for building wire seasonally declines every year. Moreover, building wire users and wholesalers have increased speculative orders since September due to strong price trend of electrolytic copper, the price indicator for copper wire. Thus the market demand may turn weak for January-March.

Sumiden Hitachi Cable estimates its annual revenue at around 63.5 billion yen for fiscal 2010. The company posted annual loss in fiscal 2008 and 2009 and the profitability is still very severe due to low shipment volume.