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Spread - cable conductor (copper vs aluminium)
What it is
Cable conductors are copper or aluminium, and the choice is economic as well as technical. Aluminium has lower conductivity so needs a larger cross-section, but is far cheaper per unit of current carried
Both are LME-priced and passed through, so the cable maker earns a conversion margin rather than a metal position
Impact on industries
- Substitution is a genuine lever - when copper is expensive, buyers accept aluminium in applications that tolerate the larger conductor
- Working capital scales with metal prices, so a copper rally strains funding without improving profitability
- Pass-through lags in the retail and dealer channel, where price lists cannot be revised as fast as LME moves
- Structurally the same conversion-charge economics as copper extrusion and steel rolling in other industries