TPT July 2020

G LOBA L MARKE T P L AC E

There was cautious optimism for Austria When Austrian chipmaker AT&S announced its first quarter’s financial results in mid-May it had maintained a stable core profit, despite having recorded a 22 per cent drop for the full year following investments to significantly expand the business. The company was “cautiously optimistic” for its April-June quarter, expecting revenue and core profit at the level of the same period last year. AT&S produces circuit boards for smartphones, tablets, and supplies European car producers, as well as device manufacturers such as Apple and Intel. Although new products in its mobile devices division might be delayed by the economic uncertainty surrounding coronavirus, the company said demand remains strong for inter-circuit (IC) substrate platforms for electronic components. (IC substrates are designed for use in high-end industrial applications, medical devices and navigation systems.) Despite AT&S deriving a good deal of its revenue from China the company has been generally unaffected by disruption to supply chains, but it cautioned that customer demand could be affected considerably through the next months. The group is planning for further investment during the current financial year to expand capacity, including its manufacturing facilities in Chongqing, southwest China. AT&S employs around 7,000 staff in China, where it operates one plant in Shanghai and two in Chongqing, about 900km from the city of Wuhan. But the euro zone suffered a fall The European Union’s statistics office, Eurostat, said euro zone industrial production suffered its steepest monthly fall on record in March, when virus containment measures severely hit activity across a broad swathe of the single currency area. Industrial production in the 19 countries that comprise the zone fell 11.3 per cent in March, month-on-month, which was the sharpest decline since records began in 1991. An earlier poll, by Reuters, showed economists had been prepared for an even greater month-on-month decline. Eurostat said production of durable consumer goods, such as cars, washing machines and television sets, had fallen the most, with a 26.3 per cent drop for the month. The output of capital goods – a measure used for investments – also fell sharply, by 15.9 per cent month-on-month. Non-durable consumer goods such as food (items that could be considered essentials, regardless of the industrial situation) recorded the smallest fall at only 1.6 per cent month-on-month. Ireland, a producer of, among other items, medical devices, pharmaceuticals and food, reported a trend-bucking 25.3 per cent increase in its industrial output.

Cornwall’s United Downs site but, instead, found high grade copper. “It’s a very exciting new discovery,” said Richard Williams, chief executive of Strongbow Exploration, the company that owns the mineral rights for the site. “It tells us there are areas of mineralisation that are relatively close to the surface and are potentially mineable. The plan is to get back in there and do some additional drilling to find out how big the zone is.” The copper, in an area that was never previously mined, was found 100m below the surface but, as surrounding mines were worked to a depth of 500m, Mr Williams said: “The hope is that this zone continues to that depth and continues laterally east and west”. He added: “We’ve found, in this zone, the average is eight per cent copper. Those types of grade are pretty rare.” Worldwide, the average grade of mined copper is about 0.5 per cent. In January 2017 Strongbow entered into an agreement with Cornish Lithium, whereby Cornish Lithium was given the right to explore for lithium in underground salt water, while Strongbow retained the rights to any discoveries in hard rock. Owen Mihalop, Strongbow’s chief operating officer, said: “The intention is to demonstrate that there is potential to discover a lot more…[but] the COVID-19 crisis has delayed that.” A spokesperson for Cornish Lithium said the company: “Is encouraged by the results [of our] drilling programme for lithium…at this site, and [is] continuing to evaluate the opportunity to extract lithium in this area and elsewhere in Cornwall.” Japan’s machine tool orders plummeted Data from the Japan Machine Tool Builders’ Association (JMTBA) showed that, during April, machine tool orders in Japan fell to their lowest level for over ten years, while total orders, viewed as an important indicator of spending on new factory equipment, hit their lowest level since January 2010. Machine tool orders in April slumped 48.3 per cent compared with 2019, and domestic demand fell 51.4 per cent from a year earlier, to its lowest in more than seven years. Compared with March, April orders dropped 27.5 per cent. The JMTBA report was one of a string of announcements that reinforced the view that Japan’s economy could slip into a deep recession. Atsushi Takeda, chief economist at Itochu Economic Research Institute, said: “Of course, there was a big decline, and it confirmed that companies are foregoing capital expenditure,” adding that the fact orders didn’t collapse even more sharply also showed that the country’s factories were still active after the declaration of the nationwide state of emergency. “It shows the lockdown didn’t stop economic activity as a whole in Japan, but [was] centred on the services sector,” Takeda said.

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JULY 2020