Brazilian sales of copper wires, cables and other processed products are expected to rise by 7 percent to 10 percent in volume in 2007 due to increased industrial growth, a copper industry leader said on Tuesday.
But the president of the Non-Ferrous Metals Industry Union of Sao Paulo (Sindicel), Sergio Aredes, added that it was difficult to forecast earnings due to volatile copper prices, which on Tuesday hit a three-months high of $6,715 a tonne on the London Metal Exchange (LME).
"Demand from the petroleum, mining, ethanol and auto industries is rising rapidly," Aredes told Reuters in a phone interview. Speaking ahead of next week's CRU 6th World Copper Conference in Santiago, Aredes said that there would also be strong demand from power transmission, railway, airport and port projects as well as civil works.
This would become clearer when the government's Accelerated Growth Program, relying heavily on private investment, is defined, he said. But telecommunications was now a less important consumer of copper conductors due to the decline of fixed-line telephones.
"There's some demand for maintenance and substitution ... cable TV is strong but it's very small part of telecommunications demand," he said. Aredes said Brazil's copper electrical conductors and processed products industry would be able to meet growing domestic demand as it had surplus production capacity of some 20 percent, slightly less for some special cables.
Aredes added that the strength of Brazil's currency, currently near a five-year high against the dollar, hadn't resulted in increased imports. "Brazilian prices are geared to international values. It's more a question of availability and delivery dates," he said, adding that some highly specialised products were imported because domestic production wasn't economic.
Imports included aluminium power transmission cables, which also contain copper, due to long delivery schedules. Aredes estimated that investment to expand production would increase capacity by 10 percent to 15 percent in 2008 but didn't have a value. Local raw material supplies were not seen as a problem.
A huge increase in copper theft, spurred by high prices, hadn't deterred investors, he said. Last month, gangs stole 106 tonnes of copper metal, up 280 percent from a year ago.
Comments
Comments are closed.