Copper clad laminate suppliers adjusting to weak demand.

TAIPEI, TAIWAN, SEOUL, KOREA AND MELVILLE, NY -- Across the globe, copper clad laminate (CCL) suppliers are making adjustments to production volumes and product pricing to cope with weakening demand. Park Electrochemical announced in December that sales for the third quarter were down 23% and profit fell by over 60%.

CCL suppliers in Taiwan and Korea are said to be conducting price wars following demand drop and lower copper prices according to industry sources. The average copper price has dropped from $3.67 per pound in August down to a December low of $1.29 per pound, a 65% drop. Some CCL suppliers have taken losses on copper in inventory that was purchased at the higher third quarter 2008 prices and not sold when demand dropped throughout the fourth quarter. These materials are being sold at a loss to clear inventory.

Some CCL suppliers in Taiwan and Korea are quoting laminate materials based on current copper prices in an attempt to gain market share and reduce inventory levels. This is a change to the common practice of quoting based on an average cost of copper over the previous two-to-three month period.

At the same time many CCL suppliers are cutting production, closing plants and reducing headcount.

The decline in CCL prices and weakened demand impacts raw material prices and production as well. As an example, glass fabric manufacturer Taiwan Glass Industrial has stopped production at two more furnaces, TT-6 in Taoyuan, Taiwan and TGF-2 in China. The company had already stopped operations at three other furnaces earlier in December.