Copper price volatility disrupts supply chains for Pakistan’s cable industry

KARACHI: The cable manufacturing sector in Pakistan is facing significant challenges due to extreme fluctuations in copper prices and disruptions in global supply chains. Fahd Chinoy, CEO of Pakistan Cables, highlighted the situation in an exclusive interview with Dawn last Friday.

Chinoy noted, “Volatility has become so extreme that suppliers are quoting prices valid for only an hour.” Copper, which constitutes approximately 60 to 80 percent of the total cost for wires and cables, is a critical imported raw material for the industry. Over the past six months, copper prices have surged from around $10,000 per tonne to over $13,000 per tonne, based on figures from the London Metal Exchange as of March 6.

While there is speculation that international copper prices may eventually decline due to potential global demand destruction and recessionary pressures, the immediate concern for Pakistan Cables is managing its supply chains. Chinoy revealed that his team had recently discovered possible delays in raw material shipments, attributing these disruptions to the ongoing war. The situation has drawn parallels to the pandemic period, when companies were compelled to rethink their logistics and sourcing strategies.

Traditionally, the cable manufacturing industry operates on tight inventories to control costs. However, the current volatility and uncertainty in global markets have forced companies like Pakistan Cables to reconsider their approach to inventory management and procurement. The industry is now grappling with the dual challenge of rapidly changing input costs and unpredictable delivery schedules, which threaten to impact production and pricing stability.

Chinoy emphasized that the company is actively monitoring the situation and exploring alternative strategies to mitigate the impact of these disruptions. However, the broader implications for the industry remain uncertain as global economic conditions continue to evolve.