If you are paying attention to the wire and cable industry, you have probably already noticed increases in the prices of copper, silver and other raw materials.
The rising costs of copper, silver, and raw materials are leading to higher prices
Whether these price fluctuations are affecting the wire, cable and connectivity products and materials you are currently purchasing or are affecting your outlook on budget projections in procurement, finance, supply chain management or product development, we have it. covered .
Let's take a look at some of the global cost pressures that are affecting manufacturers, distributors and suppliers in need of wire and cable products.
Copper
After a 22% price increase in 2020, Goldman Sachs analysts say that 2021 could soon see a record high in copper prices. These price increases are due to factors such as China's economic recovery from the pandemic, stimuli for sustainable green energy and supply disruptions.
China's growing industrial production coupled with aggressive sustainable energy initiatives credited the country as the world's largest copper consumer.
Europe, the US, and China have vigorous renewable energy initiatives to sustain greener economies and a need for the electrical and thermal conductivity of copper to help them get there.
Larger copper producing countries such as Chile, Peru, China and the US are struggling to meet high demand from countries to meet their green economy initiatives, thus playing a role in the skyrocketing price of copper. copper.
What is the difference between COMEX and Omega-Camden copper prices?
There is also speculation that as the US dollar weakens further and further against other world currencies, there are more opportunities for users of other currencies to have more purchasing power with copper and other commodities.
Chile, the world's leading copper exporter, has struggled to meet demand due to an increase in miners falling ill from the coronavirus and its companies face union strikes.
The graph below shows a trend in the last 6 months (August 2020 to February 2021) of copper prices in constant, but rapid increase.
COMEX copper price increase table
Graph indicating an upward tick in copper prices from August 2020 to February 2021
Analysts at Stifel Financial say: "Of all the metals used in generation, transmission, storage and consumption, copper remains the common denominator. Electricity generation, transmission infrastructure, energy storage and consumption require copper. ".
According to the European Copper Institute, global copper consumption is forecast to increase by more than 40% by 2035.
Silver
While most industrial wires and cables are made up of copper conductors, silver is commonly used to clad copper conductors in higher temperature applications.
Although silver has a better conductivity compared to copper and aluminum, the metal has always been more expensive.
Goldman Sachs analysts are reiterating their predictions and forecasts of a rise in silver prices (up to $ 33 an ounce) due to recent US plans to advance increased alternative renewable energy production in solar energy and 5G technology.
The main silver producing countries, such as Mexico and Peru, are still recovering from the pandemic lockdowns that are being implemented in the main mining companies that cause temporary stops in production.
Non-metallic raw materials and other costs
Other non-metallic raw materials important for wire and cable production, such as critical resins and polymeric chemicals (found in wire and cable insulation and cladding), are also rising in price.
Recently, one of the largest wire and cable manufacturers in North America indicated that its insulation and sheathing materials have recently increased in cost by 10 to 25% depending on the compound and that it will implement broad-based price increases in the spring 2021.
A lot of manufacturers have announced an increase in the costs of the packaging material commonly found in cable and wire packaging, mainly those based on wood, with increases of between 5% and 10% in materials such as plywood, wooden coils and cardboard packaging materials.
Freight, logistics and transportation costs have also risen across the market as the global economy recovers from the pandemic.