Did you know?
Copper is man’s oldest metal, dating back more than 10,000 years. A copper pendant discovered in what is now northern Iraq goes back to about 8700 B.C.
There are 1.6 billion tons of Copper reserves known in the world – it seems a lot, but when it’s gone, it’s gone.
Twenty mines account for about 99% of production – that makes for 20 very influential mines!
Pure copper’s melting point is 1,981°F (1,083°C, 1356°K). Its most important properties include superior heat transfer, electrical conductivity and corrosion resistance.
An everyday metal
Copper is a mineral and an element essential to our everyday lives. It is a major industrial metal because of its high ductility, malleability, thermal and electrical conductivity and resistance to corrosion. It is an essential nutrient in our daily diet. And, its antimicrobial property is becoming increasingly important to the prevention of infection. It ranks third after iron and aluminum in terms of quantities consumed in the USA.
Due to it’s unique conductivity properties copper is essential in electrical wiring. Copper wire price fluctuates heavily due to many different factors including the supply and demand of copper globally, the emergence of different types of wire and even seasonal conditions.
The price of Copper
Copper, until recently one of the worst performing commodities of the past two years, experienced a sustained spike of 33% at the end of 2016, posing several questions as to the direction of the market as we move into 2017.
The biggest single cause of the price rise has been a pick-up in Chinese imports, responsible for almost 50% of global copper demand. This is seen a good omen for the industry’s health.
There are some who claim it will be short-lived, but in my opinion this is short sighted.
In reality I, and many others, feel the market has the potential be driven higher this year and next, if not by outright supply tightness then by the perception the market is moving in that direction.
Put simply we’re seeing more demand from China and only 20 mines to extract it, added to the fact that it is a finite resource.
The general trend over the long term has been that copper prices have fallen since a high in 2011. These falling costs have helped offset a strengthening US Dollar against the RMB, and have resulted in a neutral outcome in the market.
Fero and the Copper story
Suffice to say the price of copper has a big effect on our business, with much of our wiring containing copper. We watch the London Metal Exchange with interest, and will continue to do so. As a business, have already seen some significant increases in raw material costs coming through. Our hope is that we will see a smoothing out of the pricing and that we will be able to absorb the extra cost without being forced to pass it on to our customers.
We will monitor the market and keep you updated on how copper performs over the next few months.