/images/PowerCableUpdate.jpg/images/southwire_100x70.jpgSouthwire Protects Customers from Copper FluctuationsSWProtectsCustomersFromCUFluctuations.htmWith the price of copper hovering at all-time highs, there's a lot of speculation going around about copper supplies and price volatility.
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Southwire Protects Customers from Copper Fluctuations

Winn Wise, Vice President, Construction, Southwire Electrical Division

With the price of copper hovering at all-time highs, there's a lot of speculation going around about copper supplies and price volatility. In these markets, wire and cable buyers are well-advised to consider their vendors' position in the copper markets. Although there is no relief in sight for the long-term trends in the cost of copper, Southwire is positioned to insulate our customers from much of the short-term speculation in copper.

Today's copper market is volatile

Here's the situation: For years, the copper market was stabilized by large inventories of refined copper in warehouses. That has changed. For over two years now, demand for copper has consistently exceeded production. We're seeing increased demand all over the world, including China's emergence as a major global purchaser.

The result is that refined copper inventories have shrunk close to zero. It appears that copper is coming out of the ground and going directly into products. And, this may be a long-term condition. It typically takes years to build the infrastructure required to add copper production capacity. These conditions make spot-market copper pricing volatile. Any fluctuations in copper supply are immediately reflected as fluctuations in pricing.

Southwire has long-term purchase agreements

The good news for Southwire customers is that we don't rely on the spot market. Most Southwire copper purchases are through long-term contracts. Southwire's purchasing strategy accommodates fluctuations in the copper market, and insures that we always have ample access to copper. We leverage our established long-term relationships with some of the largest copper producers in the world.

Southwire buys both raw copper and copper rod in domestic and global markets. We participate in these markets not just as a high-volume purchaser, but also as a supplier of rod-making technology. More than half the copper rod produced in the world is manufactured with Southwire technology. In the past, we operated one of the largest secondary copper refining operations in the world. We know the copper business and we're in it for the long haul.

Purchasing stability benefits customers

Southwire has been in the copper business for a long time, and we've always been conservative in our strategy. Long-term purchasing stability helps us buffer pricing spikes. In today's markets that strategy helps protect our wire and cable customers.