CHINA'S Chengdu Telecommunications Cable plans to cope with the rising costs of its main raw material, copper, by lifting output capacity and raising prices.
Deputy managing director Du Liangheng expected the cost of copper to rise this year, with the average price surpassing last year's figure of 25,000 yuan (about HK$23,157.50) a tonne.
Copper accounts for about half of the firm's raw material consumption, making it vulnerable to movements in copper prices, according to the latest report by Credit Lyonnais Securities Asia.
To compensate for the soaring cost of copper, Mr Du said Chengdu Telecom raised prices of its copper cables by less than 10 per cent, in January.
He said the price of optical fibre cables would remain stable this year.
Although the firm raised the prices of its copper cables, it cannot afford to raise prices too much because of competition in the copper cables market.
Mr Du said Chengdu Telecom would continue to expand production capacity so that economies of scale would help it to offset higher production costs.
