Bloomberg News

Copper Substitution May Exceed 1 Million Tons, Antaike Says

November 02, 2011

Nov. 2 (Bloomberg) -- Replacement of copper with other materials in China may reach 1.08 million metric tons by 2015, up from about 660,000 tons last year, on high prices, according to Beijing Antaike Information Development Co.

Tight refined metal supply and growing demand for wires, cables, and machinery may spur more buyers to use other materials instead of copper, said Antaike analyst Zou Jiancheng.

Copper, used in tubing and wiring, more than tripled in two years through 2010 on the London Metal Exchange, exceeding aluminum’s 60 percent climb. Concern that copper supply would fall short of demand helped prices to reach a record high of $10,190 a ton in February of this year, discouraging consumption of the metal. Substitution may reduce demand for the metal by about 500,000 tons this year, according to researcher CRU.

Substitution becomes more likely when the refined copper price exceeds 70,000 yuan ($11,020) a ton, Zou said in slides for presentation at a forum in Jinan, Shandong. Buyers begin considering substitution once the price gains above 50,000 yuan, Zou said, citing their own research. Copper for January delivery on the Shanghai Futures Exchange gained 1.7 percent to 58,670 yuan a ton today.

Use of plastic for tube production, aluminum for high- voltage energy cables and fiber optics for communications cabling is driving substitution, Paul Robinson, non-ferrous metals group manager at London-based CRU, said Oct. 4. Aluminum may replace about 250,000 tons of copper, he estimates.

--Helen Sun. Editors: Richard Dobson, Jarrett Banks

To contact Bloomberg News staff for this story: Helen Sun in Shanghai at hsun30@bloomberg.net

To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net


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