Reuters cited Mr Klaus Kleinfeld CEO of Alcoa Inc as saying that no one is happier to see copper prices climbing than he is because that meant substitutions into aluminum would increase.
Mr Kleinfeld said while speaking at The Aluminum Summit hosted by AMM that "I'm happy that the copper price has gone up. Every time it rises, those people who use copper are calling us because they want to replace copper with aluminum."
He pointed out that the price of copper has risen about 300% since the end of 2003 compared with an increase of roughly 75% in aluminum over the same period. At Tuesday's close, copper was last quoted at USD 9,140 per tonne whereas aluminum stood at USD 2,690 per tonne.
He said that current technology would allow for about 20% of copper applications to be replaced with aluminum, amounting to about 3.8 million tonnes per year. That's why I like it.
Mr Kleinfeld said that medium to low voltage electrical wire and cable applications in cities, industrial or commercial buildings is one segment where aluminum can be used as a substitute. In China, for example, overhead power lines are now mostly made out of aluminum instead of copper.
He said that is because, on a per pound basis, aluminum is twice as conductive as copper and it's one third the weight. You have to increase the diameter a little bit and you have a lighter cable. And, it's as conductive as copper. In this case using lighter cables means the supporting poles can be set further apart, so fewer are needed.
He predicted that the same practice will eventually take hold in the United States. Other replacement applications the CEO cited included building facades, wire harnesses in transportation high voltage cables and heat sinks for electronics. The price in copper goes up and what does that spell to you? the executive asked. Aluminum, I hope.
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