CESCO: Brazil’s Paranapanema increases copper products exports amid weak domestic market

Brazil's copper producer Paranapanema has been increasing its exports of cathodes, wires and rods as domestic demand continues to weaken, the company's ceo told Metal Bulletin on Monday April 13.

Brazil’s copper producer Paranapanema has been increasing its exports of cathodes, wires and rods as domestic demand continues to weaken, the company’s ceo told Metal Bulletin on Monday April 13.

“Demand has been slower in the domestic market, mainly due to the difficulty of financing,” Christophe Akli said during an interview during the annual CESCO week in Santiago, Chile.

A shrinking Brazilian economy is behind that, prompting also a more cautious attitude from Paranapanema as the risk of default grows.

This scenario naturally enhances the appeal of exports, despite “premiums that have not been extraordinary”, Akli said.

Paranapanema expects exports to account for about 45% of its total sales in 2015, compared with nearly 33% last year.

In 2014, the company’s production for sales stood at 305,353 tonnes, according to its latest financial report.

China figures as the main destination for Paranapanema’s copper cathodes – the company based in Bahia state is the sole cathode producer in Brazil.

Wires and rods shipments abroad are “not very relevant yet”, but have also been growing, mainly in the Americas, Akli said.

“This [increase in exports] has been helping to offset the impact of a slower domestic market,” the executive added.

Paranapanema’s efforts to reshape its business and reduce costs, associated with the weakening of Brazilian Real against the US dollar have also been helping to improve the results.

“A weaker Real is very positive for our company,” Akli said.

Refining “costs have been falling a lot”, as nearly 95% of its costs are in Brazilian currency, the executive added.

Danielle Assalve
danielle.assalve@metalbulletin.com
Twitter: @dassalve_mb

What to read next
The most recent financial results published by base metals mining companies highlight just how inflation is affecting profit margins, with increasing wages, financing costs and input prices all hitting profits, sources told Fastmarkets in the week to Thursday March 28
Century Aluminum is among those selected to start award negotiations for up to $500 million in Bipartisan Infrastructure Law and Inflation Reduction Act funding to build a new aluminium smelter, the company said on Monday March 25
Participants in the copper concentrates market are struggling to comprehend an “unstoppable” decline in treatment and refinement charges (TC/RCs), with every week bringing spot deals at fresh lows and rumors each “crazier” than the last, sources have told Fastmarkets
The US Department of Energy selected five base metals projects to receive more than $900 million in federal investment from its Industrial Demonstration Program (IDP), leading to a reduction of four million tonnes of carbon dioxide emissions annually, according to a statement by the Department on Monday March 25
Aluminium producer and recycler Constellium announced on Tuesday March 12 that the company is moving to test hydrogen utilization at an industrial scale as a power source in its casthouses
Fastmarkets has corrected its MB-ALU-0002 alumina index, fob Australia and its MB-ALU-0010 alumina inferred index, fob Brazil, which were published incorrectly on Monday March 18.