Posted 15 October 2012
The rescue of the 33 trapped Chilean copper miners was perhaps the only good press copper received in 2010.
Unfortunately as each plucky miner was rising skyward, so was the price of copper.
Copper price has soared over the last 12 months. So much so that in October the LME copper price had risen to USD8000 per tonne, its highest level in two years.
This is largely attributed to decreasing stocks and increased demand from China’s manufacturers. Copper stocks are reportedly down 25%, the lowest since November 2009, to 370,000 tonnes, while China’s economy continues to grow unabated.
Speculators do suggest however, that with the strengthening dollar, investors will move away from metals and into currency as an alternative investment.
This may put copper back into decline. What does this mean in reality, and for the electrical industry in the UK? While fluctuations have an obvious effect on the price of electric cable, the proportion of copper in a cables cost varies significantly.
Simple cables such as panel wiring, twin and earth, flexes and armoured cables have relatively high copper content compared to the time and processes involved in manufacturing them.
Taking the example of a 6491X PVC Conduit Wire, this may have a cost make up of 65% copper, 5% PVC and 30% to cover production, packaging, distribution and profit. Assuming that all the other elements remain the same, it is easy to see that if copper doubles in price, the cost of the cable will increase by 65%. More complicated cable with multiple cores or pairs, screens, braids or a special insulation or jacket material are less affected by copper fluctuations.
If you have a regular requirement in the medium or short term, it may be worth buying it in one go - fixing your cost and making the most of any quantity discounts on offer. This has the sizeable advantage of securing your cost and insulating yourself against any future rises and also guaranteeing continuity of supply.
Wherever possible we try and keep our prices constant. Nobody likes rises and fluctuations in price, especially in the current economic climate.
We are happy to discuss fixed pricing agreements, where cable can be called off over a pre-agreed period of time. This means you don’t have the problems of storage but do benefit from consistent pricing.