More industrial consumers in China are looking for substitutes for copper products in the face of firmer domestic copper prices since 2006, Cai Minzheng, manager of marketing department, Chinalco Luoyang Copper Co. Ltd. said Wednesday.
Domestic copper prices rose to above Yuan 60,000 ($7,846)/mt since 2006, sharply higher from slightly above Yuan 30,000/mt in 2005 and Yuan 10,000/mt in 2002.
Speaking at the 2007 China International Nonferrous Metals Market Conference in Hong Kong on Wednesday, Cai said both telecommunications and construction sectors in China were mostly affected by volatile copper price moves. "The influence of high copper price on the use of communications cables is significant. Instead of using pure copper wires, more people purchase the copper-clad aluminium wires instead." He added: "This would mean a reduction of copper consumption of about 20,000 mt/year." China now produces about 40,000-50,000/year of copper-clad aluminium wires.
Domestic aluminium prices are now quoted at around Yuan 20,000/mt, much lower than copper prices at around Yuan 62,000/mt.
"Copper products consumption in the construction sector was down about 30% year on year in 2006 affected by higher copper prices. Prices for copper plumbing and (gas) pipe are on the rise and this has reduced copper demand from the building sector in China," he said.
Cai added that more local consumers also favored using aluminium radiators to replace the copper radiators used in automobiles. "Aluminium tubes have now completely replaced copper tubes in air-conditioners of automobiles," he said.
Cai added that production costs of air-conditioners production plants were up by more than 30% due to higher copper prices, resulted from some small-scaled plants in China having to reduce, or shutting down, their production.
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