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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (9389)	11/1/2007 10:53:05 AM
From: LoneClone	Respond to of 192834

Copper substitution under control: Analysis metalsplace.com Industry experts agree that substitution of copper for cheaper materials is contributing to a decline in global demand, but not one that threatens to tip the scale toward creating a market surplus in the foreseeable future. With copper prices passing through a high cycle and ongoing technological advances enhancing the possibilities of replacement for less expensive materials, substitution remains a relevant concern for red metal producers. And while the alarmists may feel substitution may one day eliminate the need for copper altogether, many others point to the fact that as many new uses for the red metal are appearing as ways to replace it. On the conservative side, the president of Chile's state copper commission Cochilco, Eduardo Titelman, feels substitution has been and will remain "marginal," the official told BNamericas Tuesday on the sidelines of a seminar in Santiago, Chile on the future of the copper market. But some who follow supply and demand have noticed the impact of substitution on prices. Barclays Capital commodities research director Kevin Norrish commented at the Santiago seminar that since the 1970s copper has shown less dramatic price increases during high cycles than its peers in the base metals complex. That phenomenon could owe itself in part to the occurrence of substitution, Norrish said. But for those inclined to worry, the bright side is that in the markets where copper demand decline has been heavy – such as copper cables being replaced for fiber optics, or plumbing tubes replaced for plastic composites – substitution is occurring for mostly technological reasons, the analyst said. Meanwhile new uses for the red metal are popping up frequently and are compensating for the substitution, International Copper Association (ICA) technology director Hal Stillman said in an interview on the sidelines of the seminar. In untraditional uses emerging, ICA is currently involved in a project in Chile to create new applications for the red metal in the aquicultural and energy sectors, Stillman said. The bottom line Stillman estimated in his presentation at the seminar that in 2006 the plumbing tube market used 97,000t less red metal, the roofing strip business used 52,000t less, telecom cable demand fell by 50,000t, that industrial power cable by 22,000t, auto heat exchangers by 25,000t and utility power cables by 17,000t. But according to Norrish, that does not mean all markets are eliminating copper. The analyst in fact contended that supply will continue to underperform in 2007, despite an expected 4.4% rise in refined output, and cause a 110,000t deficit. In 2008 the deficit is expected to thin to just 19,000t, Norrish added. – BNamericas