Strong demand from the automotive industry has filled the order books of Japanese fabricators of copper strip, with most repotted to be producing at full capacity at the moment, and demand expected by some to increase a further 6-8 percent in early 2006. Third quarter SSP production in Japan increased by just 1.1 percent year on year, but September saw copper strip output rise by 7.6 percent to 22,340 tonnes following two months of decline. In the same month car output rose by 3.1 percent, boosted by exports to North America. The strong demand has also enabled Japanese fabricators to avoid a reduction in fabricating margins, which many consumers have tried to negotiate as copper prices have remained at all-time highs. The strength of the auto sector has more than compensated for slightly weakening demand from the electrical sector. Many fabricators in East Asia are shifting their focus from 'standard' brass mill products to higher value added products, where demand has remained good during the year, and margins are higher. For example, Dowa Mining has recently announced that it is to expand its output capacity of high value added copper alloy sheet and strip of alloys such as phosphor-bronze and nickel-silver, whilst reducing its output in copper and brass sheet and strip. Part of the reason for the ongoing success of higher value added brass mill products is that many Chinese mills are not yet able to operate as efficiently as Western mills, because their output yield from scrap on complex alloys is likely to be significantly lower, leaving a market for high quality, high specification sheet and strip from overseas.
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