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The Copper Theft Barometer level increased to R13 million in September 2014 from   R12 million in August 2014. This is the fourth monthly increase in the year in what has been a relatively volatile 9 months to date, with the Barometer ranging from R15.4 million to R10.7 million. The increase in September gives further support to the view that copper theft may be stabilising at levels above R10 million per month. The Copper Theft Volume Indicator increased to 173 metric tons in September from 160 tons in August and 158 tons in July 2014.

The international average monthly spot price of copper to date decreased to $6 734 per metric ton in October 2014 from $6 871 in September and $7 005 in August 2014. The movement in the copper price mirrors the weakening in other commodity prices like gold and oil, so the downward copper price trend is typical of a broader global trend. South African exports of waste copper products dropped significantly to $7 million in August from $15.4 million in July and $24.6 million in June 2014. Waste metal has been subject to a domestic preference pricing system (PPS) of 10% since September 2013, so the significant drop in exports in August is unlikely to be related to the PPS and likely to be a reporting issue or a structural factor.

The trend over the past 9 months has been a definite setback from the earlier downward trajectory from 2012 to 2013 and suggests that the policy interventions against copper theft need to be ramped up. The prospect of constrained power supply until early November as announced by Eskom on Wednesday adds urgency to the task of ensuring optimal efficiency of South Africa’s power supply network.

Source: London Metal Exchange (LME). Rand price uses 3 month moving average smoothing

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