CDA: 'We want Regulations Based on Sound Science'

Research sponsored by the Copper Development Association plays an ongoing role both in developing new markets for copper products, and in protecting existing markets from misguided government regulation.

“There is nothing that can give us a bad image faster than getting on the wrong side of an environmental issue,” says Ray Arnold, CDA vice president of environmental sciences.

For example, in California, which Arnold described as “a hotbed of environmental activity,” CDA is promoting a research methodology it used successfully to measure the copper content in fresh water. California is now working to establish environmental standards for acceptable copper content in saltwater. If overly restrictive, such standards could unnecessarily curtail the use of copper panels in exterior architectural applications, for example, due to fears that rain runoff would allow excess copper into the water system.

“Criteria using our approach can be up to seven times higher, depending on the water chemistry, than the criteria EPA has proposed,” Arnold said. “We want regulations based on sound science and not precautionary principles.”

While CDA provides valuable economic and market data to the copper industry, its part in communicating copper’s value outside the industry, to legislators, regulators and the public, is often even more important, said Robert Weed, CDA vice president of rod and bar products.

For example, he described recently proposed clean-water legislation that would require the replacement of lead water service lines, which CDA favors. The rule was so restrictive, however, that it would have banned even the small amount of lead common in plumbing faucets and fixtures. “This would have eliminated the largest market for brass round bar products, and was totally unacceptable to CDA members and faucet manufacturers,” Weed explained.

A team of copper and plumbing industry executives managed to persuade legislators that the proposed standard was unnecessarily restrictive, though similar legislation may be reintroduced this year, he said. “We intend to keep working to make sure our industry is not treated unfairly by legislators or regulators.”

The EPA is expected to publish a white paper in June detailing its position on lead in drinking water caused by plumbing fittings and fixtures. CDA experts are actively cooperating on a number of research projects into the subject “to make sure they don’t have a predetermined outcome,” Weed added.

The copper industry is the beneficiary of U.S. government research into lighter weight electric motors for aircraft and other equipment that will utilize more copper and brass castings, according to John Cowie, CDA vice president of flat-rolled products.

Working with the Alliance to Save Energy, CDA is also promoting the use of technologies such as hybrid electric vehicles and wind generators that contain high levels of copper.

The association also sits on many standards panels to safeguard copper’s interests, Cowie added. “Being excluded from a standard is basically the kiss of death for a product.”

Just as in the steel and aluminum industries, suppliers of copper products are concerned about unfair competition from foreign imports and the exodus of manufacturing customers from North America.

“The challenge is to stem the movement of parts offshore, which creates open capacity and lower margins for both ends of the supply chain,” said Don Commerford Jr., vice president of Revere Copper Products Inc., Rome, N.Y. “A lot of us would like to believe in free trade, but most of us would [settle for] fair trade.”

Moderating a market panel at the CBSA meeting last month, Commerford noted that service centers ship about one-third of the copper products consumed in the United States.

Copper is a 3.7 billion pound domestic market, 32 percent of which is sheet, strip and plate, 30 percent rod and bar, and about 38 percent tubing. Domestic mills satisfy roughly 80 percent of that demand. “Twenty percent of that 3.7 billion pounds consumed is coming from overseas. Many of us in the fabricator industry have concerns about the level of imports,” Commerford said.

Presenting an overview of the sheet, strip and plate segment, Todd Heusner, vice president of Outokumpu American Brass Co., Buffalo, N.Y., noted that the import share has stayed around 21 percent, with the exception of 2001 when it peaked at 26 percent. Germany tops the list of importers with a 35 percent share of the foreign trade, followed by Sweden, Poland, The Netherlands, Mexico, Chile, Italy, Switzerland and Japan, each with 10 percent or less.

Major end uses for brass mill products include electronics and electrical products, building products, ordnance and coinage, transportation equipment and various household products. Distributors’ share of these markets has continued to grow in the past decade. “The relative share of brass mill shipments to distributors increased about 20 percent from the base period of 1992-94 to 2003,” Heusner said.

Describing the market for brass rod, bar and tubing, Jim Palmour, vice president of sales at Chase Brass & Copper Co. Inc., Montpelier, Ohio, noted that rod and bar accounts for about 1.14 billion pounds of all copper and alloy products, 83 percent of which is supplied by domestic mills.

The rod and bar segment took a nosedive during the recessionary years of 2000-2001, but has recovered by about 6 percent. Distributor sales of commercial and plumbing tube have declined in recent years, he said, partly because of the shift in production of air conditioning equipment to China.

Michael Jemison, president of Heyco Metals Inc., Reading, Pa., described the function of the reroller in the copper market. The primary purpose of a reroller is to absorb overcapacity from the mills. “It is almost impossible to design a fully integrated mill without overcapacity at the heavy end, though mills are doing a better job of that today, which makes for a smaller space for the reroller,” he said.

Rerollers help to fill unpredictable demand in cases of supply disruptions due to equipment breakdowns at the mill, or in cases where stamping jobs ramp up more quickly than the producer anticipated.

Rerollers also add finishing capacity to the market. They can roll to very thin gauges and sell in smaller lots than the major mills. Rerollers can also offer a broader array of alloys, sourced from a variety of casting sources, he said.

Rerollers like Heyco also offer toll processing services to service centers that may want to convert obsolete or slow-moving inventory to a thinner, more marketable gauge.

“I’m extremely excited about the antimicrobial properties of copper that the CDA has researched and is trying to promote,” Jemison said. “The sky is the limit. In the years I’ve been in business, I haven’t seen any market potential this great.”