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Copper prices soar amid labor dispute
Mark LaPedus
EE Times
(08/22/2006 11:35 AM EDT)
SAN JOSE, Calif. — Supply and prices for copper continue to be a major
concern for the electronics industry amid an ongoing labor strike at the
world's largest copper mine.
Union workers at BHP Billiton Ltd.'s copper mine in Chile extended a
strike for the 16th consecutive day on Tuesday (August 22) after
rejecting the company's latest offer to settle the dispute, according to
a report from Bloomberg.
Copper prices have soared since BHP (Melbourne, Australia) shuttered the
world's biggest copper mine over two weeks ago. The world's biggest
mining concern also ended negotiations with union workers, who have been
blocking roads to the Escondida site, according to the report. The mine
in Chile supplies 8.5 percent of the world's copper.
For some time, there has been a major concern for the soaring prices of
copper, which is used for chip interconnects, lead frames and a
multitude of other applications in the electronics industry.
The soaring price of copper and other raw materials over the last few
months has forced network communications and coax cable maker Andrew
Corp. to recently add a steep surcharge across many of its products.
Prices for copper have doubled in the past year, due in part to huge
demand in China. Copper is also used for wire and pipes.
And prices are increasing again after spiking in May. By May 10, copper
prices on the London Metal Exchange, a major metal market, hit a
whopping $8,148 per metric ton for spot-market cash buys, up 79.5
percent from $4,537 per metric ton at the beginning of January. Prices
for three-month contracts, with copper delivery slated for July, climbed
to $8,005 per metric ton, up 82 percent from $4,397 per metric ton on
Jan. 3.
This week, copper prices are all over the map. On Monday (August 21),
copper jumped 2.8 per cent to $7,695 a ton in London, according to the
report.
Copper for October delivery on the Shanghai Futures Exchange jumped 2.3
percent to $8,565 a metric ton in China, according to the report.
Soaring copper prices could hurt potential strategies at various
companies. For example, Kulicke & Soffa Industries Inc. (Fort
Washington, Pa.), a maker of wirebonding equipment, is working with
customers to evaluate copper wire bonding and to compare the results to
wire bonding with gold, the traditional material, the company revealed
in its third fiscal quarter financial results.
With gold costing more than $600 per ounce, and having followed an
exponential curve to double in price in the last four years, it is no
surprise that packaging companies are considering lower cost
alternatives. Now, it's unclear if K&S will move forward with copper.
--Jennifer Baljko contributed to this article