Record prices for copper will not lead to large-scale use of cheaper alternatives by industrial consumers because copper retains clear technical advantages in wiring, French cable group Nexans (NEXS.PA: Quote) said on Wednesday.
Benchmark copper prices CMCU3 on the London Metal Exchange breached the $10,000 mark for the first time last month after a rally driven by Chinese demand and tightening global supply.
This has led some manufacturers and distributors to warn of a shift towards less expensive substitute materials like aluminium and zinc, while in France a surge in copper theft has led rail and power firms to consider alternatives. [ID:nLDE71E1Q1] [ID:nLDE6BF1HO]
Nexans was increasingly using aluminium conductors and developing other alternatives but did not see a big shift away from copper, Chief Financial Officer Frederic Michelland said.
"If you reasoned in purely financial terms, copper would have been abandoned a long while back in favour of aluminium," he told reporters at the group's head office.
"Overall, copper still has a fundamental attractiveness that should last for some time to come."
Substitution had remained limited in the past few years, representing between 450,000 and 600,000 tonnes annually compared with a global market of some 19 million tonnes of refined copper, Nexans executives said at a briefing on copper.
Aluminium had claimed the largest share among copper substitutes and Nexans was notably developing use of copper-clad aluminium as a product that resolved some of the conductivity snags of aluminium.
However, the cost advantage was not enormous and there were still technical drawbacks, Michelland said.
"There is not yet a miracle (substitute) product," he said.
Nexans, which supplies cables for sectors like energy, construction and construction, is one of the world's largest private consumers of copper, having used around 450,000 tonnes of the metal in 2010.
