Telephone: 023 8061 8891
Email: sales@advancedalloysltd.co.uk
ADVANCED ALLOYS LTD
HOME SERVICES PRODUCTS BLOG CONTACT US
 

Blog

Latest Posts

Posted on Friday April 30, 2021

Attempting to analyse the analysts.

It doesn’t take a rocket scientist – or in this case, mining industry analysts – to work out that copper is going to play an important part in all our futures and in particular in the development of low carbon economies. Copper is essential for most things electrical and its in high demand for everything from electric vehicles to wind turbines and managing geothermal energy. Pretty much anything which creates, stores or distributes electricity requires copper.

The price of doom and gloom

Stable prices require an approximate balance of supply and demand. Where supply fails to meet demand, prices go up. Where there is too much supply, prices fall until there is parity. 

Given the rapid growth of electric vehicle production, especially in China, and the inexorable move to EVs in Europe and the US, plus increasing demand for wind turbines globally, demand for copper is already on the up. 

Copper used for other purposes such as roofing and piping, even domestic wiring, is going to be faced with stiff competition. Instinctively, it seems logical that prices for copper will rise and perhaps it looks like there is little to be done except grin and bear it. 

But, being careful not bury our heads in the sand, perhaps it is not quite that simple.

“Copper is the new Oil”

A recent report of this title from investment bank Goldman Sachs predicts copper prices on commodity markets to reach $15,000 per metric tonne by 2025. This figure is, naturally, an approximation. However, when compared with prices in late April 2021 (approaching $10,000) it is the size of increase which is the key factor.

Trends in demand are clear and supply is potentially limited. In particular, new mines are expensive and slow to set up, and even the extension of existing mines can take years rather than months to pass regulatory scrutiny. Match this picture with copper as a lynch pin in the changing world economy, and the comparison with oil may seem fair. 

Many commentators have picked up on this and, unsurprisingly, some are scaremongering. Doing so, however, misses the finer details of the comparison.

Resources and Resourcefulness

One of the first things to note is that current fluctuations in global copper prices may not be completely representative. As the pandemic sweeps backwards and forwards around the world, some copper producers find supply chains interrupted by border closures – most recently with Chile, for example.

Additionally, there is still plenty of opportunity to increase copper re-cycling. This is unlikely on its own to match growth in demand, (most copper wire to carry electricity still needs to be made from the purest new metal) but it could go some considerable way to supplying copper for non-electrical use. The advantage of recycling copper is also that it can also be done nationally or regionally, where supply can be adjusted most quickly.

Finally, there is the direct comparison with oil itself. At times of high demand and insufficient supply, oil prices increase. When this happens it becomes economically viable to exploit reserves which were previously too expensive to access. Thus supply and demand balance out again. Translating this to copper, it probably means developing existing mines further, re-processing in-production waste to extract more of the metal, recycling more and eventually opening brand new production fields. In short, supply and demand will balance out. 

How long is a piece of copper wire?

The big question, therefore, is not whether there will be enough copper (there will), but whether there will be enough copper soon enough. One argument for increased prices is that they will help pay for the development of new supply. Some argue that the mining industry is more risk averse than the oil industry, and that it may not be ready to scale up production as quickly as is thought necessary.

On the other hand, and while nothing can be certain, it seems fair to say that where there is demand and opportunity, resourcefulness will kick in to meet the challenge.  

Will it do so in time? It’s unhelpful to speculate. In terms of domestic UK supply and demand, we may face increasing prices, but most probably gradually so. That may be unavoidable – after all, the green revolution was never going to be free.

--

Advanced Alloys Ltd is a specialist supplier of products made from the highest quality alloys of copper, brass, bronze and zinc. They have an exhaustive range of products suitable for all industries. Alloys can be delivered in wire, tube, sheet or bar form, and cut, bent or manipulated as required. An experienced logistics team makes sure that products reach their destination in perfect condition as swiftly as possible.

Telephone: 023 8061 8891 Email: sales@advancedalloysltd.co.uk



Posted on Wednesday March 31, 2021

Considering a shiny red metal in a post pandemic world.

Global commodity markets function according to their own internal logic. So do the bureaucrats and civil servants tasked with unravelling the implications of Brexit. Throw in projected increases in demand for copper and copper alloys, and the future looks interesting. With clients in the EU and with most of our copper sourced from outside the UK, we’re positioned right at the heart of a copper-coloured matrix. This is not without its challenges, but it also gives us unique opportunities to see what’s going on.

Buying and selling the future

Copper prices are determined by the commodities markets in a complex interaction of actual and predicted supply and actual and predicted demand. Despite the reputation of commodity markets to fluctuate wildly on whim and rumour, the reality is that trends tend to be very rational over the medium and long terms.

In 2020 the markets struggled with competing pressures of reduced production, pandemic uncertainty and the understanding that future demand would continue to be high. In early 2021 copper prices on the London Metals Exchange (LME) fluctuated considerably, from $7712 per metric tonne on 2nd February, to $9617 on 25th. Prices have been more stable since: $9022 on 5th March and $9098 on 22nd of the month.

Occasional extremes don’t disguise longer terms patterns.

Several factors indicate the price of copper continuing at around these levels which are at an eight year high. Demand in Asia, which is leading the post Covid-19 recovery, continues to be high. Likewise, the requirements of sustainable development and ‘green’ energy call on copper for electricity generation, transmission infrastructure, energy storage, and consumption.

The world has plenty of copper still to extract but over time there will be more reliance on recycled copper (already a thriving industry) and ores from deeper mines and potentially of lower grade. Prices are unlikely to fall but, given the relative predictability of these factors, nor should we see the sort of irrational increases that inhibit economic growth.

Oh, Br***t!

Whatever you or I felt about the Brexit referendum of 2016, the reality is that we now operate in a different environment when compared to life within the EU. From our end, we kept (and keep!) a careful eye on the new regulations and requirements and in particular the paperwork that’s needed for trade into and out of Europe.

It would be foolish, of course, to pretend that there have been no hiccups; there is definitely a tendency for new rules to be interpreted differently in different places across the continent. We’re definitely still learning. So, there are some issues around part loads to Europe and delivery times for these have become longer in some cases. We’re working hard to make this as painless as possible for our clients. On the up side, it does look as if there will be greater uniformity and predictability at border crossings as everyone gets used to new systems.

The same applies, albeit to a lesser extent, to orders coming in from Europe. Overall we can see that, provided we keep focused on the details of import and export, business will remain buoyant, with smoother delivery in both directions.

The future looks bright

Having  paid attention to costs – both long and short term – we’re well placed to continue supplying our clients with high grade products at realistic prices. Copper is never going to be cheap, but one of the cornerstones of our business is good value, so we always work hard to pass on any price advantage that we can secure.

Our business in January and February has been brisk, and March also looks healthy. And if we are supplying copper, it means that many other businesses are using it too. So, after a challenging 2020, we feel fortunate, very cautiously, to be sensing the start of economic recovery. We feel privileged to be in a position to work with so many good customers and doubly so to believe that we might all be within reach of something like normal business activity. The future is bright. The future is copper-coloured.

--

Advanced Alloys Ltd is a specialist supplier of products made from the highest quality alloys of copper, brass, bronze and zinc. They have an exhaustive range of products suitable for all industries. Alloys can be delivered in wire, tube, sheet or bar form, and cut, bent or manipulated as required. An experienced logistics team makes sure that products reach their destination in perfect condition as swiftly as possible.

Telephone: 023 8061 8891 Email: sales@advancedalloysltd.co.uk


Posted on Saturday February 27, 2021

Why copper is a real investment in the future.

Copper is the most remarkable metal. It is not strictly a ‘precious’ metal of course, but its multiplicity of uses renders that distinction irrelevant. It’s much cheaper than gold but many times more useful, and it’s 100% recyclable without any loss of its properties. In fact, it is estimated that as much as 50% of Europe’s demand for copper (and 35% worldwide) is met from recycled sources, and that at least 60% of all copper ever produced is still in use.

 

Greening the world with copper

 

Although copper production can have a relatively high carbon footprint (it varies considerably depending on origin), its complete recyclability renders it carbon efficient in the long run. And once produced, copper alloys empower sustainable development.

 

Copper is already making a contribution to a low carbon future. It is essential for wind turbines, which use it in their ring generators, and it features significantly downstream, once the electricity is generated – electric cars, trains, and circuit boards all use copper to maximise efficiency and durability.

 

Copper, everywhere

 

There are other uses which are less dramatic, but still important. Copper is second only to silver in its heat conductivity, so copper saucepans are prized possessions, and copper alloys are now the most common metals for coins. Despite the trend towards digital payment, many economies continue to rely on coinage and, because of its recyclability, copper features prominently.

 

Copper’s resistance to corrosion means it’s not only ideal for piping clean water, it is also used in the storage of nuclear waste. Copper is used in the superconductors in the Large Hadron Collider at CERNE, and more prosaically copper is still the favourite metal for electrical wiring. Copper coating on some surgeons’ scalpels aids conductivity, so the blade can be heated, cauterising as it is cuts and reducing bleeding.

 

Sourcing and recycling

 

For industrial applications, copper is generally considered to be third in importance only after steel and aluminium. And demand for copper and its alloys is expected to increase by 50% in the next 20 years, from 28 million tons per year to 42 million tons in 2040. Some estimates, citing growing use in sustainable industries and green technologies, puts demand showing a staggering tenfold increase by 2050.

 

Apart from copper wire for electrical use, which is made from the freshly milled metal, recycled copper therefore has real importance in the supply chain. Fortunately there are well described standards for recycled copper and copper alloys – there are international, European and domestic specifications governing purity of scrap and the final recycled product.

 

Ask an expert

 

As Europe produces approximately 45% of the world’s recycled copper, there is a good chance that recycled copper products bought in the UK are of European origin. If it comes from outside the EU, it will still be produced to recognised standards. And, of course, if you’re curious, your wholesaler will be able to confirm exactly what you’re getting – with a copper bottomed guarantee.

 

Data quoted in this article can be found at https://copperalliance.org/

--

Advanced Alloys Ltd is a specialist supplier of products made from the highest quality alloys of copper, brass, bronze and zinc. They have an exhaustive range of products suitable for all industries. Alloys can be delivered in wire, tube, sheet or bar form, and cut, bent or manipulated as required. An experienced logistics team makes sure that products reach their destination in perfect condition and on time every time.

Telephone: 023 8061 8891 Email: sales@advancedalloysltd.co.uk




Posted on Saturday January 30, 2021

How the nature of specialisation has changed.

We are familiar with the ever-growing number of specialisms and specialists which seem to saturate the modern world. They are nothing new, of course. Ever since man came down from the trees, there have been specialists – hunters, fishers, cooks, warriors, healers.

And in the modern world, specialists play a vital role. We would, for example, be in a dreadful place without the scientists who specialise in developing vaccines. On a slightly more prosaic level, I would much rather have a tooth removed by a qualified dentist than his or her predecessor, the notorious barber-surgeon.

 

Specialists for everything?

It is hard to argue against the fact of specialisation. Through history it is specialists who held the reins of power. For centuries it was soldiers, then in the middle ages it was lawyers. And because most lawyers were clerics, power rested with the church, an institution that specialised in wielding earthly power as well as spiritual.

In the eighteenth and nineteenth centuries, lawyers stayed near the top, and were joined by scientists and engineers. Perhaps the twentieth century was the era of big capital and accountants. The 21st certainly looks very much like the age of big tech, with hordes of specialist programmers.

Sometimes it can look as if the generalist has gone for good, and in the sense of the all-round “renaissance man” this might be true. But if you look around, the type of specialist is changing. More and more we get things done by collaborating, by merging specialisms together. It’s obvious in the field of computing and medical science, but it happens elsewhere too.

 

Metals support the World

Nowhere is this more the case than with metals, each of which requires specialist manipulation to maximise potential. Steel and Copper may be the most significant industrially; steel for its ubiquity in construction and manufacture, and copper for the multiplicity of alloys it can accommodate.

With alloys, the specialist in one metal really needs to be a specialist in others. How else can we understand that range of uses and tolerances of different alloys? With copper alloys you need a supplier familiar with all the characteristics of all the alloys made using copper. Only a specialist will do.

In fact, the modern specialist is rarely a specialist only one field. Doctors are specialists in many fields, even if they work mainly in one. Those who work with paints need to understand chemical behaviours even if they’re not chemists; and those who work with metals need a depth of knowledge about sourcing of raw materials, production processes and appropriate applications. Add to that an understanding of the way commodity markets impact on retail prices, via wholesale, and we are edging back to the multidisciplinarianism beloved of the Enlightenment.

 

Don’t cut corners - go to the specialist you need

Inevitably specialists come in for a bit of flack. Occasionally the odd politician makes disparaging comments about experts, but specialists are here to stay, and we should welcome the fact. After all, we are all a specialist of one sort or another. The real challenge is in finding the right one at the right time. Seek out the specialist who has the knowledge to advise you well, and the vision to do so honestly and fairly, time after time.

--

Advanced Alloys Ltd is a specialist supplier of products made from the highest quality alloys of copper, brass, bronze and zinc. They have an exhaustive range of products suitable for all industries. Alloys can be delivered in wire, tube, sheet or bar form, and cut, bent or manipulated as required. An experienced logistics team makes sure that products reach their destination in perfect condition and on time every time.

Telephone: 023 8061 8891 Email: sales@advancedalloysltd.co.uk

 





Posted on Sunday December 20, 2020

or ancient solutions to modern problems

The shock of the new
Life is full of surprises and 2020 has certainly brought its fair share of those in the form of multiple and formidable challenges. Even putting Brexit aside, the Coronavirus (Covid-19) Pandemic not only took many countries by surprise, but it has had global impacts on supply and demand with which we’ll be dealing with for many years to come.

It is hard to imagine an individual, business or industry that has not staggered under the weight of these changes. Many businesses have collapsed and those that continue to trade are doing so in markets that have experienced radical change.

The metals industry is no exception. In 2020 The World Steel Association forecasts that steel demand will have dropped by 6.4%, with an expected recovery in 2021 of demand of only 3.8 % over 2020. Relatively small percentages perhaps, but in terms of the tonnage of steel produced and sold, of huge consequence.

 

Not all metals are equal
Copper has also faced an initial drop (major producer Rio Tinto reported that its copper production for the first quarter of 2020 was 8% below 2019 levels) but overall global production for the year has fallen by only 2.1%. And the longer term outlook for copper is much stronger. According to analysts S&P Global Market Intelligence, worldwide production is expected to rise by 4.3% year on year after 2021.

The reasons for this are complex but lie with the fact that copper is remarkably versatile

 

Copper - civilisation’s jump start
Without copper, there would have been no bronze age; bronze is an alloy of tin and copper, first developed about 3500 years ago. Without copper to make bronze, on the dusty plains outside Troy the Greeks and Trojans would still have been fighting with sticks and stones.

Through the ages, copper has proved itself invaluable, and in practical terms more useful than gold. It withstands heat well, it’s malleable and its a recognised anti-microbial; beneficial properties include a short life for bacteria and viruses with which it’s in contact.

Copper is supremely recyclable. It conducts heat and electricity very efficiently and the phrase ‘copper-bottomed’ now stands for anything genuine, trustworthy and reliable. In the mid eighteenth century it was discovered that barnacles did not grow on copper, so sailing ships with copper sheeted bottoms were faster through the water and needed less maintenance – everything about them was better.

Today copper and hi-tech copper alloys are used in myriad industries, from construction (those beautiful green roofs as well as piping) to wiring, electric motors, healthcare and the most delicate of electronics.

 

Approaching the New Normal
All this means that the basic outlook for copper and copper alloy products is good. However, such has been the economic shock of the pandemic that if you need copper or sell it, it’s not just a case of turning on the tap.

The needs of individual businesses are changing. Business recovery can be complex. Some are working to get back on track. Some are changing direction or diversifying well out of their comfort zone. Copper production may struggle to keep up with demand, so established wholesalers will probably be the people to go to for a reliable – copper bottomed – supply.

In such challenging times it is easy to lose track of some fundamentals. So, be cautious of consultants offering miracle cures, and it good to remember that commercial flexibility is a means to an end, not a purpose on its own right.

In the same way that the uses of copper have changed over time, so too do our approaches to problem solving. Finding new markets or serving existing ones, supporting old clients or providing incentives to new ones, this is a time to take stock and take positive action. Be open to new ideas and, like the bronze-age masters of their new technology, do whatever you do, really well.

 

Advanced Alloys Ltd is a specialist supplier of products made from the highest quality alloys of copper, brass, bronze and zinc. They have an exhaustive range of products suitable for all industries. Alloys can be delivered in wire, tube, sheet or bar form, and cut, bent or manipulated as required. An experienced logistics team makes sure that products reach their destination in perfect condition and on time every time.

Telephone: 023 8061 8891 Email: sales@advancedalloysltd.co.uk



 

ADVANCED ALLOYS

Doing exactly what it says on the copper

 

Advanced Alloys Limited
Unit 17, Parham Drive
Boyatt Wood Industrial Estate
Eastleigh
Hampshire SO50 4NU

Telephone: 023 8061 8891
Fax: 023 8061 1481

© 2021 Advanced Alloys Ltd. Website by Future Point 4 Business.

TOP