Copper Shortage Sparks Aluminium Boom in Cable Industry
Copper prices have surged above USD 14,400 per tonne due to scarcity concerns, prompting aluminium to become an increasingly attractive alternative.
The London Metal Exchange (LME) cash copper price rose to USD 14,424.50 per tonne on August 11, up from USD 14,290 the previous day. Meanwhile, exchange inventories fell to 214,550 tonnes, down from more than 244,000 tonnes on August 3.
The price spread between immediate and three-month delivery has widened to USD 207.50 per tonne, a significant increase from the USD 69 premium at the beginning of August. This suggests genuine scarcity rather than tariff speculation.
Aluminium prices have also risen, increasing by around 3.5% to USD 3,373 per tonne over the same period. However, inventories declined from 262,650 to 253,400 tonnes, and spot material costs virtually the same as three-month delivery, making aluminium a viable alternative.
The shift towards aluminium may have significant implications for the cable industry, where copper is often used due to its conductivity. Aluminium, however, is less conductive but significantly lighter, balancing out the two factors. With copper costing more than four times as much per tonne, the switch could lead to material costs roughly one-eighth of what they are currently.