Copper theft in South Africa rose to its highest level in two years last month, according to the SA Chamber of Commerce and Industry’s (Sacci’s) Copper Theft Barometer.
The Copper Theft Barometer increased to a level of R34.7 million in March 2012 from the much lower R22.8 million in February. This is the highest level for the Barometer since early 2010, but the sudden and unexpected increase is hopefully an outlier rather than the beginning of a highly problematic upward trend in copper theft, the Sacci said. The outlier is most likely due to a financial year-end accounting reconciliation that included data on copper theft from the previous six months.
The barometer – started in December 2010 – is an indicator of the estimated cost of replacing copper cable stolen from major users Transnet, Telkom, and Eskom.
“Our discussions with role players in law enforcement revealed that copper theft in South Africa has been in decline from April due to successful efforts against criminal syndicates. The new Second Hand Goods Act also contains specific measures against dealing in stolen copper, for example a constraint against trading in burnt copper wire. The successful implementation of the Act together with improved operational intelligence should reduce copper theft levels and prove March’s level to be the last spike before the permanent downturn,” Sacci said in a statement today.
The spot price of copper fell to US$8 251 per metric ton in March from US$8 465. This is the first monthly decrease in the price of copper for the year and may signal a slight downward trend for the second quarter of 2012 barring a strong show of investor confidence in Europe. The price of copper, like the price of many other industrial commodities, has been very volatile over the past six months due to global uncertainty over Europe’s economic stability.
Global copper theft is ultimately driven by the high demand for the metal from end users in rapidly growing economies like China. In the depths of the 2009 global recession for example, the price of copper fell below US$4 500 per metric ton because of overall economic stagnation. At present the world economy is tentatively recovering from the last recession, but the fears about financial stability in Europe and a so-called “soft landing” in China is dampening investor confidence in a strong global recovery for 2012 and therefore limiting upward movement for copper prices.
The short-term price trend together with strengthened local policing efforts against copper theft syndicates makes dealing in stolen copper less profitable and more risky for organized criminals and should translate to lower copper theft levels in South Africa.