Coppermetals suppliers appear determined to win this year's "cockeyed optimism award." In the 1990s, copper demand enjoyed a boom from phone companies, which used the metal in the networks they were building ferociously. This sparked an increase in copper production, which flooded the market with excess when telecommunications fell into a rut. That led to cathode production curtailments, which appear to have worked; Economist Greg Barnes at Canaccord Capital Corp. sees the market as "essentially balanced" in 2003. Yet, in the face of a three-year recession in demand, suppliers of coppermetals—from cathode smelters to brass mills to service center operators—insist sales to stamping houses, electronics firms, and defense markets are about to erupt, which would create a scenario of undersupply. Several distributors note that leadtimes for sheet and strip products have increased from some brass mill suppliers, and they believe this is tangible proof of increasing product demand. The fact is that view doesn't match market realities. Shipment data from the Copper & Brass Servicenter Association shows total copper and copper alloy shipments have dipped from mid-2002. And actual coppermetals purchasing surveys show that business conditions remain weak and that demand will grow just 1% in 2003.

stundza@reedbusiness.com