FORT LAUDERDALE, Fla.
Hurricane Sandy will boost the construction sector and increase
demand for Encore Wire Corp.s copper products, chief
financial officer and vice president Frank Bilban told
"In construction, in general,
obviously (in the) short term Sandy is going to provide a pop,"
he said on the sidelines of the American Copper Council fall
meeting in Fort Lauderdale. "There is going to be a lot of
repair, a lot of remodeling and some rebuilding."
The hurricane that hit the East
Coast Oct. 29 left thousands without power and destroyed and
damaged homes in New York and New Jersey.
"So we are hoping that over the
next one to two years that, while Sandys victims are
certainly in our hearts and minds, from a business perspective
for construction materials it should be positive," he said.
"They claim theres 250,000 cars
destroyedthats a boost to the car industry. No
matter how you look at it, long term its going to create
consumption. And long term could be next year; it could be
The presidential election had a
negative effect on sales at McKinney, Texas-based Encore in
September and October, but now that its over, Bilban has
hope that construction will resume.
"September and October, it was
like the whole country froze and we saw two straight months of
poor sales. ... My view is weve already had four years of
this administration, you kinda know where its going. You
either really need to build something or you dont," he
said, adding that the issue of a fiscal cliff is now a more
"If Congress can get together
and at least take some positive action on that, Im
hopeful that 2013 and 2014 ... will be positive for our
industry," Bilban said.
While Bilban remains cautiously
optimistic about future copper demand, he declined to forecast
Copper price volatility has
declined, he said, but proposed physically backed copper
exchange-traded funds (ETFs) from New York-based JPMorgan Chase
& Co. and BlackRock Inc. could see it return and perhaps
"The volatility has gone down,
but now theyre talking about adding ETFs, which we
personally as a company dont think is a great idea,"
Encore, together with
Carrollton, Ga.-based Southwire Co. Inc., London-based Luvata
UK Ltd., Newark, N.J.-based AmRod Corp. and the London-based
metals-focused hedge fund RK Capital Management LLP, have
written to the Securities and Exchange Commission twice to
voice their opposition to the proposed ETFs (amm.com,
"The industry in general is down
on it. We dont know that their ability to tie up copper
stocks is going to be productive for the consumer at all. That
could have an impact," he told AMM. "If anything, we
just think it will a) add volatility, and b) potentially
constrict supply to some extent."
Encore was shocked by the
SECs recent statement that there is no strong correlation
between copper inventories, which the copper users believe will
be greatly diminished if the ETFs are approved, and prices
(amm.com, Nov. 9).
"That stunned us," Bilban said.
"Obviously, if you want to refute the laws of supply and
demand, you might want to go back to business school or
While Encore is opposed to the
ETF, the company isnt taking any precautionary measures,
"We buy copper on a monthly
average Comex price, in general, and we plan to stick to that.
With our balance sheet and our history, copper suppliers have
generally been eager to sell (to) us, and we anticipate that to
continue," Bilban said.