This industry consists of establishments that roll, draw, or extrude copper, brass, bronze, and other copperbased alloys. These establishments create basic shapes such as plate, sheet, strip, bar, and tubing.
331421 (Copper (except Wire) Rolling, Drawing, and Extruding)
The 128 companies in the rolling, drawing, and extruding of copper industry are commonly known as copper fabricators. Wire rod mills, brass mills, ingot makers, and powder plants are all classified as copper fabricators. Wire rod mills and brass mills account for about 85 percent of all copper fabricators in the United States. Copper foundries are discussed in SIC 3366: Copper Foundries. After receiving smelted and refined copper ore and copper scrap, fabricators convert the raw copper into wire, strip, sheet, plate, rod, bar, and other copper products used by various industries.
Key end-use markets for copper and copper alloy are the building/construction, electrical and electronic products industries, and the transportation, industrial machinery and equipment, and consumer products industries. More than 41 percent—or 3.5 billion pounds—of all refined copper in the late 1990s was consumed by the building/construction sector. Valued for its conductivity, copper wire is essential to heating and cooling systems and is the primary type of building wire used.
After a decade of overcapacity and falling prices in the 1980s, the copper industry stabilized in the late 1990s. However, like other commodities markets, the copper industry is prone to cyclical price fluctuations. Shipments for 2000 topped $7.7 billion. Fueled by a strong domestic building and transportation market and an increasing need for copper in developing nations, demand remained strong in the early 2000s.
Copper in the United States passes from the mines to the smelters. In some cases these facilities are owned by the same company, and in some cases the mining and smelting are done nearby. The mining and smelting companies produce copper, and the wire rod mills, brass mills, and foundries are the consumers of copper who prepare the metal for delivery to manufacturers in various industries.
Mining companies process copper ores, most of which comes from open-pit mines. The ores are refined and sometimes alloyed with other elements, such as zinc or beryllium. The percentage of copper and copper alloys that went to wire rod mills in 1997 was 56 percent, while 36 percent went to brass mills, 4 percent went to ingot makers, and 2 percent to foundries. All of these fabricators created copper-based products used throughout U.S. industries. The total refined production of primary copper was 2.69 million short tons in 1997, and net imports of refined copper were 646,000 short tons.
Most brass mills in the United States operate in three areas. While one division produces rod, bar, and shapes, another division manufactures strip, sheet, and plate, and the third division produces commercial and plumbing tube. Brass rod and brass strip, two of the most popular copper alloys produced in the industry, possess the kind of corrosion resistance, machinability, and electrical properties that enable them to be used under adverse climatic conditions. Air-conditioning tube and plumbing tube are two examples of the unalloyed copper and high-copper alloys that comprise another major segment of the mill's output.
There are several associations for copper production. Foremost is the Copper Development Association, which tracks market statistics and releases public relations reports. The American Copper Council—also a trade organization central to the copper industry—tried to increase its audience by expanding its Internet presence during the 1990s.
Copper mining began in the Middle East and reached its zenith in the American West. Small mining operations spawned prosperous towns in Michigan and Arizona. In the mid-eighteenth century, miners in the colonies discovered copper ores in what is now the northeastern United States. They mined the ores, but English law forbade construction of smelting works, so the ore was sent to England for smelting and refining.
After the American Revolution, many copper workers moved to the new United States. Copper sheathing began being used on wooden ships as early as the 1790s. The copper protected the ships from the pressure and corrosive effects of the ocean. Great demand from the shipping industry helped the budding copper industry, but the United States still depended on copper imports from England and South America. In 1806 U.S. importers of copper asked Congress to exempt copper from customs duty. Protests by copper industry pioneers resulted in lower tariffs on copper imports.
Steamships had copper parts by this time, because copper was better than pinewood at containing steam in boilers. Later, with the rise of American industry, growing copper fabricators created stripping, boiler plates, rivets, and other copper-based items that were used in an increasingly diverse number of industries and products. Copper nails replaced cast iron nails in building, and the boom in building towns and cities across the new nation resulted in a windfall for the copper industry.
Development of efficient flotation processes around the turn of the century and advances in open-pit mining techniques quickly turned the United States into the world's largest producer of copper.
The brass mill industry began in Connecticut during the early days of colonial America. There were copper mills from Waterbury south to Ansonia, where melting and rolling techniques were developed and tested. Though largely forgotten in Connecticut, the industry remains centered in the eastern United States.
Like many other mineral and mining industries, the copper market was plagued by overcapacity and falling prices in the 1980s. As a result, companies began merging to try to improve efficiency and gain some protection from the fluctuations of the market. This continued in the early 1990s, as buyouts and consolidation led to a leaner field. Mining companies were previously tied to large, multiproduct wire and cable mills, but in the mid-1990s, they spun off their fabricators to try to become more efficient. Some refining companies, however, added continuous cast wire rod mills to the end of their production process, thereby effectively opening their own millworks.
According to an article in the trade magazine Copper Talk, shipments of strip, sheet, and plate declined in the 1980s, but demand for copper products increased slightly. Shipments to the electrical and electronic products markets grew to represent 36 percent of shipments; this was an increase of 12 percent from two years earlier, according to Copper and Brass Development Association statistics. The percentage of copper mill products that were consumed by the building construction industry was more than 40 percent in 1991. Electrical and electronic products industries received 24 percent, and the industrial machinery industry accounted for 13 percent.
In 1996 the copper industry was shaken again—this time by a trading scandal at Sumitomo Corp. Yasuo Hamanaka, Sumitomo's chief copper trader, was exposed as a heavy speculator in copper futures. His unauthorized dealings cost the company more than $1.8 billion and sent the price of copper plummeting. By mid-June 1996, copper prices had fallen 64 percent to 79 cents per pound; they rebounded in the fall to 91 cents per pound. The price for raw copper remained unsettled as traders feared that Sumitomo had such huge quantities of the metal that, if it were sold, prices would be depressed even more. By 1997, copper prices stabilized, and demand became steady. A 1997 strike at Chile's Escondida copper mine, the world's largest, made copper prices rise as inventories fell. Stockpiles at the London Metal Exchange were low, falling in a year by more than 50 percent to 149,100 metric tons.
In 2000, the value of refined copper shipments was more than $7.7 billion. During the late 1990s, wire rod mills, brass mills, ingot makers, powder plants, and other industries in the copper fabrication sector had consumed more that four million short tons of copper annually. Wire rod mills—the largest segment of the industry—consumed approximately 2.3 million short tons of refined copper and 28,000 short tons of scrap copper per year in the late 1990s. As Trends in the Use of Copper Wire & Cable in the USA noted, "Nearly all newly mined copper… goes into the production of wire rod, and thence to wire and cable products." Brass mills consumed a total of 1.9 million short tons of copper, alloy, and ingot, while powder plants used more than 19,000 short tons and other industries a total in excess of 95,000 short tons. (Copper foundries consumed 185,000 short tons.)
The building/construction industry—including building wiring, plumbing and heating, and airconditioning and commercial refrigeration—was the most sizable end-market for fabricated copper products, accounting for 41.4 percent of the late 1990s market. Electrical and electronics products, such as power utilities, telecommunications systems, business electronics, and lighting and wiring devices, absorbed 26 percent of fabricated copper in the late 1990s. The third largest consumer of fabricated copper was the transportation industry, which accounted for 12.4 percent, incorporating copper parts into cars, trucks, buses, railroads, ships, and aircraft. Industrial machinery and equipment—such as in-plant equipment, industrial valves and fittings, nonelectrical instruments, off-highway vehicles, and heat exchangers—represented 11.2 percent of the late 1990s market. Consumer and general products, mainly appliances and electronics, used 9 percent of fabricated copper produced in the United States in the late 1990s.
Copper demand in the United States during the late 1990s was driven in large part by the booming economy, which fueled the industrial, commercial, and residential housing markets. As the most popular metal for building wire, copper benefited from the upturn in construction. Moreover, the demand for electrical services (which use copper wire as their primary conduits) continued to soar in the late 1990s as more appliances—especially computers—became commonplace in American homes. The auto industry also profited from the nation's good economy. As cars became increasingly reliant on electronic systems, copper played a more central role in this industry, as well. While no slowing in these sectors was predicted, copper was losing ground in telecommunications, where fiber-optic cables began supplanting copper wire.
When the economy in the United States began to slow in the early 2000s, copper demand in certain industries, including the floundering telecommunications industry, began to wane. However, plunging interest rates bolstered demand in the automobile and home construction industries, which helped to offset diminished copper demand elsewhere.
Major companies engaged in copper rolling, drawing, and extrusion processes include Marmon Group, Inc., a conglomerate of more than 100 autonomous manufacturing and service companies, that racked up more than $6 billion in sales in 1998 and employed 35,000 people. Marmon's primary copper subsidiary is Hendrix Wire and Cable Inc. Mueller Industries Inc., a manufacturer and distributor of copper tubing and related fittings, reported 1998 sales exceeding $929 million. As one of the leading U.S. manufacturers of copper and copper alloy tube for commercial products, Wolverine Tube Inc. manufactured fabricated copper for residential airconditioning units, heat exchangers, and utilities. With 3,316 employees, Wolverine Tube's 1998 sales were $617.5 million. Through its Olin Brass subsidiary, Olin Corp. produces copper alloy sheets, strips, and foil. Its 1998 sales were approximately $1.4 million. Chase Brass, a subsidiary of Chase Industries Inc., primarily manufactures brass rods for plumbing fixtures and heating and air-conditioning parts. With about 700 employees, the parent company's sales topped $433 million.
In 2000, the industry employed 19,955 workers, down from 22,500 in 1995. There were 17,050 production workers. Compensation was reported at $775 million, up from $711 million in 1995. The average hourly wage for production workers in the copper fabrication industry in 2000 was $16.44, compared to $14.56 in 1995. Production workers worked 42 hours per week on average.
From 1990 through 2005, the number of extruding and forming machine operators declined 1.1 percent. While there was better growth potential elsewhere, the outlook was not nearly as bleak as that in other copperrelated industries. The number of mining, quarrying, and tunneling occupations, for instance, was expected by some observers to fall by almost 20 percent, while the number of foundry mold assembly and shakeout workers was expected to fall more than 20 percent.
According to the Asian Wall Street Journal, the U.S. copper industry was "pinning its hopes for future growth on an expected strong demand for the metal from the emerging economies of China and Central Europe". Copper demand rose as developing nations built infrastructures with telecommunications cables, power cables, and other basic building tools. Besides China, Taiwan, and South Korea offered potentially large markets. Total wire mill product exports in 1997 were 446 million pounds, a substantial gain since 1993 when 274.5 million pounds were exported. Bare copper wire, insulated wire and cable, cooper strip, sheet, plate, and foil products also were being exported. Total fabricated copper exports in 1997 exceeded 766 million pounds, compared to 471 million pounds of exports reported in 1993.
U.S. fabricating industries closely watched their international competitors so they would not dump products below market costs into the country; overcapacity quickly leads to price declines. Imports occupied a sizable role in the U.S. market. In 1997, 320.5 million pounds of wire mill products were imported, up from 147.5 million pounds in 1993. Brass mill imports accounted for an additional 587 million pounds of imports, and total fabricated copper imports in 1997 exceeded 912 million pounds.
The United States formed an International Copper Study Group in the early 1990s along with 17 other countries in the copper industry, including Germany, China, Chile, Peru, and France. They aimed to allow informational exchanges between producing and consuming countries, and to increase copper production and consumption.
Patricia Foley, a copper executive writing in the trade magazine Copper Talk, said, "In the late 1980s, most strip and sheet producers invested to serve the growing electronic markets. They installed automatic gauge control and statistical process control capabilities to enable them to produce strip with consistent and close tolerances." The emphasis on these new precise technologies was apparent in most of the companies involved in the rolling, drawing, and extruding of copper. For them to remain competitive in the market, their products had to meet a higher standard of excellence and precision. Companies improved their productivity and efficiency, which enabled the U.S. industry to increase production.
Black, William. "Trends in the Use of Copper Wire and Cable in the USA." New York: Copper Development Association, 1995. Available from http://www.marketdata.copper.org/trends-cable.html/ .
"Copper Prices Rise a 5th Day As Chile Strike Slows Output." New York Times, 24 April 1997.
Einhorn, Cheryl Strauss. "Red Metal Rising." Barron's, 6 January 1997.
Hyde, Charles. Copper for America: The United States Copper Industry from Colonial Times to the 1990s. Tempe: University of Arizona Press, 1998.
Levinson, Marc. "The Mighty Copper King." Newsweek, 24 June 1996.
Penson, Stuart. "West Pins Copper Sector Growth on Emerging Nations' Demand." Asian Wall Street Journal, 21 May 1997.
"Short Term Copper Price Looks Sour." Metals Week, 18 October 1998.
United States Census Bureau. "Copper Rolling, Drawing, and Extruding," October 1999. Available from http://www.census.gov .
United States Census Bureau. "Statistics for Industries and Industry Groups: 2000." Annual Survey of Manufacturers. February 2002. Available from http://www.census.gov .
"U.S. Copper Industry Continues Record Growth." PR News-wire, 15 October 1999.