By K R Nambiar
Despite the steep drop in prices of copper from the historical high to historical lows, prices of structured cables haven’t seen any drop in prices. Customers and in turn partners are demanding cabling vendors reduce the prices in keeping with the current prices of commodities.
Copper which was trading at $8,100 at the London Metal Exchange in August 2008 is down to $2,960 a week before commodity markets closed for Christmas.
"Our customers are questioning the high price of networking cables. The cable manufacturers need to reduce the prices at the earliest as it is affecting business,” said A L Srinath, Director, Shell Networks.
Seconded Madhav Chandran, Managing Director, CyberLand, “With copper prices down almost 70 percent, it’s difficult to understand why there has been no reduction in prices of cables. It imperative to reduce market prices in time of slowdown as it will help create demand.”
However some vendors believe that price cuts on cables are still a quarter away.
"While copper prices went up in a staggered manner, unfortunately the price drops have been drastic. The entire process of acquiring copper, using it for manufacturing cable, and then shipping it from locations outside India by sea is a long process. Hence the price drops we have seen in commodity market reflecting on price drops on the finished product are at least a quarter away," explained Dilip Kumar, Director, Product Development, ADC Krone India.
Kumar also blames the sudden rise in dollar value for prices staying high. “While commodities have gone down, the dollar has risen by almost 25 percent. Also there have been reports that some copper mines plan to shut down production as the prices have reached a point that makes their business unviable. This could mean that the prices may not go down much,” he added.
However cabling vendor Nexans India is in the process of reducing the prices soon. “Some manufacturers are still sitting on huge inventory bought at old prices, and hence they may be unable to lower prices. However, at Nexan you will soon see us reducing the prices,” said Nagendra D, Country Manager, Nexans India. |