A common belief among investors is that all companies dealing with non-ferrous metals benefit greatly when their prices soar. However, this is rarely the case. To assess the effects of rising aluminium or copper prices, two factors must be considered:
Regarding the first factor, it is essential to distinguish three broad groups. The first group comprises miners or "primary producers," whose profitability is directly linked to metal prices—the higher, the better. The third group includes final users who incorporate metal semi-products into their own, more complex products, such as an aluminium sheet in a reefer trailer or a copper tube in a heat pump. For these users, metal is a cost element. They often cannot pass increased prices onto their own products, causing discomfort when metal prices rise and relief when they fall. Between these groups are the semi-fabricators.
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