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Challenges of Japanese Copper

Fabricating Industry

and Ways to Revitalize them

May 13, 2013

Tetsu Takahashi,

Chairman of

Japan Copper and Brass Association

(JCBA)

IWCC Tokyo Joint Meeting

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Today’s Presentation

1.Outline of JCBA and copper fabricating business.

2.Analysis of effect after Lehman crash (Lost 200K ton/Y)

3.Changes in business circumstances surrounding JPN

4.Analysis of 3 major fields ( Coil & sheet, Tube, Bar & wire)

- Negative factors, countermeasures, future risks

- Transition of end markets in production

5.Technical edges for bright future

6.Summary

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Outline of Copper Fabricating Products

Production & Shipment in 2012

Production Shipment Semiconducto

r 5%

Connectors 15%

Transportation

9%

Electric instruments

9%

Air-Conditione

r 9%

Daily necessities &

Gas machinery

6%

Water Tap 6% Bulb

3%

Construction & others

8%

Disribution 14%

Export 16%

７７０K Ton

Coil & Sheet51%

Bar & Wire32%

Tube17%

Source: METI Statistics

4

Trends

in Copper Fabricating Products

50

60

70

80

90

100

110

120

130

140

150

0

200

400

600

800

1000

1200

1400 K Ton

1,022

1,061

1,168

988 964

992

1,045

989

1,047

1,004 944

654

867

824 769

801

Outlook

Bar & Wire

98 99 00 02 03 04 05 07 08 09 10 11 12 13

Yen/$

Change in Production

in Comparison with

2001

Coil & Sheet

Tube

06 01

'02 to '08 '10 to '12(Average) (Average)

Coil & Sheet ＋１６％ ＋３％

Tube △１６％ △４０％

Rod & Wire △５％ △２５％

Total ＋１％ △１７％

Source: METI Statistics

Comparison with Steel & Aluminum

5

0

20

40

60

80

100

Recovery ratio

Steel

Aluminum

Copper

After Lehman Crash

88% 84% 78%

Source: METI Statistics

6

Lost 200,000 Tons and Why

0

10

20

30

40

50

60

70

80

Rod&bar Coil&sheet Tube

K ton

・Rod & bar ： 80,000 ton

・Coil & sheet ： 60,000 ton

・Tube ： 56,000 ton

・Total : 196,000 ton

1) Decrease in demand in customers themselves ⇒ ２８％

2) Shifting of production sites to overseas countries ⇒ ２５％

3) Switching into foreign copper material ⇒ ２０％

4) Changing into material other than copper ⇒ １４％

5) Miniaturization in electronics parts ⇒ ９％

*4) and 5) are mainly because of High Copper Price & Volatility

Source: METI Statistics

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Changes in Business Conditions

in Japan and Challenges for Copper

Severe economic slowdown hitting Japan

Acceleration of stronger Yen

Difficulties of end users

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Analysis of Three major Manufacturing Fields

-Coil and Sheet-

50

60

70

80

90

100

110

120

130

140

150

0

100

200

300

400

500

600

Bronze

&

Others

Brass

Copper

Ｊ．Ｙｅ

ｎ

KT

Yen/&

1.Negative Factor

2.Countermeasures

Outlook

00 01 02 03 04 05 06 07 08 09 10 11 12 13 99 98

Source: METI Statistics

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Trends in Production of

Automobile and Terminal

Connector & Terminal

0

2000

4000

6000

8000

10000

12000

14000

'03 '04 '05 '06 '07 '08 '09 '10 '11 '12

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Automobile

Terminal &Connecter

Source: METI Statistics

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Trends in Production of

P. C. and Semi-Conductor B Parts

M PC

Lead flame

0 .0

5 .0

10 .0

15 .0

20 .0

25 .0

30 .0

35 .0

40 .0

45 .0

'0 2 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12

0 .0

2 .0

4 .0

6 .0

8 .0

10 .0

12 .0

Integ ratedCi rcui t ofSemiconducter

PersonalComputer

Source: METI Statistics

0

50

100

150

200

250

300

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13

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Analysis of Three Major Manufacturing Fields

-Tube-

1.Negative Factor

2.Countermeasures

3.Futuristic Risk

Outlook

KT

Source: METI Statistics

12

Trends of Air Conditioner Shipment K Sets

0

1 ,000

2 ,000

3 ,000

4 ,000

5 ,000

6 ,000

7 ,000

8 ,000

9 ,000

'02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12

Aircondit ionerImport

Air Condit ionerProduct ion

6.9 6.6

6.9

7.5 7.5 7.4

7.7

6.8

8.2 8.3 8.5

Source: Production METI Statistics

Import MOF Statistics

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Analysis of Three Major Fields

-Rod & Wire-

1.Negative Factor

2.Countermeasures

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

0

50

100

150

200

250

300

350

400

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Other Bar &

wireBrass wire

Copper Wire

Braoze Bar&

WireBrass Bar

Copper Bar

Copper Price

Outlook

K Ton

Copper Wire

$ /kg

Brass Bar Source: METI Statistics

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Trends in New Housing Starts

0

200

400

600

800

1000

1200

1400

2003 2004 2004 2005 2006 2007 2008 2009 2010 2011 2012

New

Housing

Starts

K Houses

Source:MLIT Statistics

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Seek after the High Quality

and High Performance

of Products in Japan

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Past Present Future

Connector (Electronics)

Small housing Small pitch connector

High-multi pin

lower profile

Phosphor bronze (~8Sn) Brass

Strength

Spring

Bend form-ability High Phosphor bronze (~10Sn) Cu-Ni-Si alloy Cu-Ni-Co-Si alloy Cu-Ti alloy

High strength

Stress relaxation

Higher strength

Lower stress relaxation

Computer TV

Smart phone Tablet computer

Consumer

Smaller and thinner

More miniaturized products

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Past Present Future

Connector (Automotive)

Multi layers plating Tin-plating

Low Tin Phosphor Bronze(ex.C50715) Brass

Strength

Spring

Bend form-ability Cu-Ni-Sn Alloy

Cu-Ni-Si Alloy

High strength

Stress relaxation

Terminal size 2.3mm 0.64mm

0.5mm

High voltage terminal Small housing Fine pitch connector

High-multi pin

lower profile

Low insertion

Higher strength

Ag-plating

Hybrid and Electric vehicle Electronic control Automotive

Lower stress relaxation

Higher electrical conductivity

Contact reliability

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Leadframe

Past Present Future C19210, C19400, C70250

Strength

High

electrical / thermal conductivity Stamping frame

Etching frame

Etching frame

LED for Flat-display

Computer Consumer

Hybrid and Electric vehicle Electronic control Automotive

Power-Transistor : Si chip IGBT and Power-Transistor : SiC chip

for Lighting

QFN

Small package Miniaturizing

Lower profile

QFP DIP

Smart phone

Tablet computer

High strength

Thinner gage

Higher strength

Lead free solder of chip-bonding

Leadless package

Remaining stress free High surface quality

C19210, C19400, C19240

Wire-bonding on plating-less

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1. Spread of R410A use, higher pressure alternative refrigerant 2. New application of R744(CO2) as natural refrigerant

3. Threat of competing material

0

5

10

15

R-22 R-410A CO2

MP

a

Pressure of each refrigerant

Contain elements

(UNS No.) Feature

Ｃｕ-Ｃｏ-Ｐ(C15650） ◆Precipitation hardening by cobalt (Co) ◆A small amount of cobalt

Ｃｕ-Ｓｎ-Ｐ(C50100） ◆Solid solution hardening by tin (Sn) ◆Excellent capacity for being cold worked

Ｃｕ-Ｓｎ-Ｚｒ-Ｐ(C50150） ◆Solid solution (Sn) and Precipitation (Zr) hardening ◆Super-heat resistance performance

Ｃｕ-Ｃｏ-Ｓｎ-Ｚｎ-Ｎｉ-Ｐ (C18620）

◆Precipitation hardening by cobalt (Co) ◆Super-heat resistance performance

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reduced % in comparison

with C12200

UNS No.

Application C15650 C50100 C50150 C18620

Heat exchanger for ACR

１０～２０％

Connecting tube

１５～３０％

Muffler, Accumulator

１５～４０％

Heat exchanger for furnace brazing

２０～３０％

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Standardization Program

１．Japanese Industrial Standard (JIS H 3300) JISH3300 was revised at July, 2009 and October, 2012.

２．High Pressure Gas Safety Act High pressure gas safety act was revised at July, 2012.

JCBA supported this program and intends the expansion

of these new high-performance products in Japanese

HVAC & R market.

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・Foresee the Market Development

by ＡＢ１９５３、ＮＳＦ/ＡＮＳＩ６１

・Standardization

・Lead Content (2types) : 0.01% or less

: 0.1% or less

・ Bismuth Types:C6801～C6804(4types)

・ Silicon Types :C6901～C69328(2Types)

・Importance of Recycle System

・Already applied to

・Electronic and Electric equipment parts such as PC

・Gauge of Water Service

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Evaluation of

Anti-Dezincification Brass

＜ Change in Evaluation Methods＞

Conventionally: Evaluation with dezincification depth

Going forward: Evaluation with dezincification depth

+ dissolution corrosion depth

= Maximum corrosion depth

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Summary

・Still struggling production due to weak demand

( 1000 K ton ⇒ 800 K ton )

・Unfavorable business circumstances uniquely surrounding JPN

( Strong Yen, slump of end users etc.)

・Characteristics of 3 major items and their future

-Coil & Sheet: For electronic use by developing more

functional material

-Tube : Penetration of high strength tube into

market for AC etc.

-Bar & Wire : Environmentally friendly material such as

lead-free brass etc.

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Many thanks !