Price Trends and Impact on Cable markets

(Provided by CRU)

Continuing Price Volatility

A review in the December 2006 issue of the ICF Newsletter discussed the impact of price trends of major raw materials on the cable industry and the industry's customers. During 2005 and 2006 prices of many key raw materials used in cable-making rose sharply. In some cases material prices became much more volatile, with substantial fluctuations in market prices on a short timescale. Over the last twelve months prices of most raw materials have generally remained at high levels, and price volatility has continued to be a key feature of base metal markets, including copper.

Impact of High Material Prices

In this article we update and extend the discussion of raw material price trends contained in the earlier article from December 2006. We look at developments in some key cable-making materials over the past twelve months and we also discuss the impact of high material prices on some sectors of the cable market that were not covered in the previous article in depth: auto cable and building wire. We highlight some potential issues relating to material substitution (especially substitution of copper by alternatives) in some types of cable, and review the possible impact of CCA (copper-clad aluminium) conductors. Another very real issue in many markets that has become a much bigger problem as a consequence of persistently high metal prices is cable theft.