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Copper prices September 17, 2006

Posted by Jasper in broadband, General.
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I remember reading an article last year about thieves stealing lamp posts, parking meters and copper wire around the world to sell as scrap metal in China. Just today I came across an article from Reuters Oddly Enough about residents of two villages in eastern France that could not make any phone calls. Criminals had stolen 550 meters of copper cable. According to Reuters theft of the metal has become increasingly common in France as thieves try to cash in on soaring copper prices. The thieves took more than a tonne of copper cables that had been dug out and left exposed awaiting repair work, operator France Telecom said.

Recent data from London Metal Exchange (see http://www.lme.co.uk/copper_graphs.asp) shows that copper levels have probably reached their peak earlier this year.

price_charts.png

Indeed there appears to be an increasing consensus that most metal prices will fall substantially from their current peaks. The question is when, and by how much? The IMF forecasts a substantial fall in copper prices coming down to US$1.50 per pound by around 2010 against the current level of US$3.60.

Maybe telecommunications incumbents should hurry up and pull their old copper cable out of the ground and install some fibre while they can still get a recent deal on copper. Then again maybe the cost of pulling the cables out the ground cannot offset the copper current market price. But if it does, it could tip the balance sheet in favour of accelerated fibre deployment. An unlikely driver of FTTx.

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