Copper producers eye boost in exports

Bloomberg

Japan’s copper producers may increase exports in the coming years to make up for shrinking domestic demand as manufacturers head overseas to avoid higher costs and the impact on sales of a stronger yen, according to Pan Pacific Copper Co.

Exports are expected to rise 16 percent to 505,000 metric tons this year, after slumping 17 percent to 437,000 tons in 2011 following the March 11 earthquake and tsunami, said Akira Miura, executive officer of marketing at Pan Pacific, Japan’s top producer.

Manufacturers from Panasonic Corp. and Honda Motor Co. to Sony Corp. and Toyota Motor Corp. are moving production abroad after the yen reached a postwar high of 75.35 on Oct. 31, making exports less competitive.

Costs at home are also increasing as Tokyo Electric Power Co. plans to raise electricity rates from April on higher energy imports caused by a series of reactor shutdowns prompted by the Fukushima nuclear crisis since last March.

“The rebuilding demand may last for three years to 2014 and we cannot rule out the possibility that domestic consumption will decline below 800,000 metric tons a year from 2015,” Miura said Friday.

“With annual output capacity of 1.5 million tons at home, we may need to ship more metal overseas to maintain the capacity level.”

The industry has to develop better ore purchasing terms through investment in overseas mine projects and cut shipping costs to China and Southeast Asian nations, including Indonesia, Malaysia and Thailand, he said.

In Japan, production may increase 13 percent to 1.545 million tons this year after dropping 14 percent last year, while demand may decline 5.4 percent to 1 million tons in 2012, even with rebuilding, Miura said. Last year, domestic demand fell 4.3 percent to 1.057 million tons, he said.