what the, page-9

re: what a joke... All I can say guys is watch the copper stockpile.

Chinese wire manufacturers are apparently switching to aluminium where they can as copper is just way too expensive atm.

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Copper users switching to aluminium
Last Updated(Beijing Time):2006-05-29 11:09

High prices for copper are prompting Chinese electric cable and wire makers to switch to aluminium, boosting the demand for the lighter metal, industry officials said Thursday.

Shifting to aluminium could reduce the demand for copper in China, the world's biggest consumer of the metal, which is used in wiring and construction.

"Some of our customers have switched to aluminium wires," an official for Tbea Co. Ltd., said, adding the change started when the price of copper reached 60,000 yuan (US$7,479) a ton last month. The price was around 72,000 yuan Thursday.

Tbea is one of China's top five makers of electric cables and wires. It consumes more than 120,000 tons of copper annually and less than 10,000 tons of aluminium.

Electricity flows through copper with less resistance than other commonly available metals, so little energy is lost in transmission, which is crucial for high-voltage cables. But aluminium is almost as good on low-voltage cables.

The Tbea official said smaller clients had canceled orders due to higher copper prices. Chinese power firms are its main customers.

With copper prices staying at record highs, China has allowed cable and wire manufacturing firms that hold contracts to supply copper-based cable for State power projects this year to deliver aluminium-based cable as an alternative, said industry officials.

Copper-based cable usually is used for underground cabling and aluminium for overhead wiring.

World copper prices have risen more than 70 percent this year, supported by expectations of continued strong demand from China, where consumption of the metal is forecast to rise 14.5 percent this year. The price was about 2.5 times the price of aluminium, which has risen 21 percent this year.

Copper and aluminium eat up about 70 percent of cable makers' production costs.

Baosheng Group, the parent of listed Baosheng Science and Technology Innovation Co. Ltd., is trying to reduce the risk that buyers will fail to pay for copper-based cables that they had ordered, leaving it with expensive stock.

"We have raised deposit requirements to 30 percent of the value of an order, from 10 to 20 percent," an official said.

Baosheng is also one of China's top five cable makers. Its clients include the builder of the Three Gorges Dam in China and the Cuban Government.

With cable makers using more aluminium, demand of the metal has picked up over the past few weeks, said traders.

"Many orders were held up in the first quarter as clients waited for lower prices. But they are starting to put out those orders," said an official for one aluminium fabricating plant in Guangdong, referring to products such as window frames for the building sector and computer fans.

But the demand could fall in the second half of this year because of lower exports of aluminium products, they said.

Chinese aluminium fabricating plants are expecting the government to reduce a tax rebate on exports of aluminium products from 13 percent to 5 percent of the sale price from July 1.

Cutting the rebate would raise sellers' price demands and could weigh on China's export of aluminium products.

China's aluminium product exports rose 54 percent year on year to 308,937 tons in the first four months of 2006.

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Me thinks it needs to cool off a little so that the fundamental users wont go for alternatives in the marginal use markets where other cheaper base metals such as Aluminium can do the job.

Take it from someone who's watched it all happen with tantalum and ceramic capacitors,if the raw material gets too expensive they will go to alternatives.

d.