NEW YORK (Commodity Online): Manufacturers are reportedly using aluminium instead of copper for electric cables and wires. Considering that aluminium is more than 3.5 times cheaper than copper, one should ask- why not?
LME copper is trading around $8300/tonne while LME aluminium is at around $2150/tonne.
In a Bloomberg Interview, Oleg Mukhamedshin of Rusal said that copper demand is decreasing by 400,000 tonnes a year through substitution with aluminium accounting for more than half. Rusal is the world's largest producer of aluminium.
The declining demand for copper could tilt the current market shortage into a surplus, a thought echoed by a recent Barclay's report which states that copper will be in a surplus in 2014 while aluminium will be in a shortage.
As more and more manufacturers continue to move away from copper into aluminium, the less demand will be seen in copper, resulting in a decline in prices. The electronics industry accounts for over 35% of global copper consumption.
