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Morningstar reported that Copper can be substituted by Aluminum in the near future.
Morningstar reported that Copper can be substituted by Aluminum in the near future.
The market news is quoted as saying:
For the last couple of years, supply has been tighter in copper than in steel and aluminum, causing a quicker recovery in copper prices, which hit record levels while steel and aluminum still fall short of their precrisis peaks. The copper/aluminum price ratio, which was only a little higher than 2 leading up to and including the early quarters of the recession, has since risen sharply to a new high of nearly 4. While steel has exhibited the least volatility, both steel and aluminum are currently priced in line with annual averages prior to the boom and bust of 2008 and 2009. Copper, however, has had a turbulent few years. It has remained at or near all-time highs since the fall of 2010. Looking at pricing alone, copper appears to be the most vulnerable to substitution effects, but steel faces a regulatory framework that may give the more expensive aluminum an edge.
