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Article Excerpt
MCN editors report back from the Copper Development Association's Global Market Trends Conference Sept. 6-8 in suburban Chicago, where experts forecast the effects of global economic shifts, China's emergence and record high prices for red metal. Despite some product substitution, demand for copper and brass in such major end-use markets as energy, automotive and construction remains relatively healthy.
Copper Faces Ongoing Substitution Threat
WITH THE PRICE OF COPPER around $3.30 per pound--three to four times higher than the historical average--some end-users are looking for cheaper alternatives. While such product substitution should concern the copper and brass industry, it's not reason for panic, analyst Jon Barnes, principal consultant with London-based CRU, told executives at the CDA conference.
"Substitution has always been with us. Substitution will always be with us. It's nothing new. But, of course, such high copper prices are," he said.
Analyzing copper substitution losses in today's market is not easy, he added. Separating pure substitutions from larger trends such as globalization and demand migration requires some interpretation.
The most commonly cited example of copper market erosion is in the plumbing industry, where plastic...
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