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| 2012 aNNual rEpOrT prySmiaN grOup
AN INTEGRATED
SUPPLY CHAIN
SOURCING
CONSOlidaTEd FiNaNCial STaTEmENTS >
DIRECTORS’ REPORT
The main raw materials used by the Group in its production
processes are copper, aluminium, lead, special glass and
coating for optical fibres and various petroleum derivatives,
such as PVC and polyethylene.
In a market with basically stable volumes on the previous year
and a still weak global economic scenario, the average prices
of the principal commodities in 2012 experienced contrasting
trends: in the case of Base Metals, prices fell significantly on
the previous year, with declines in the region of 10% -15% in
USD prices (2-10% in Euros), reflecting a gradual slowdown
in the emerging economies and consequent concerns about
a possible reduction in future demand for commodities by
these countries. Among the various petroleum derivatives,
the price of polyethylene was driven up by higher ethylene
prices in Euros, while PVC and plasticizers experienced less
price fluctuation due to lower demand than the previous year.
• Copper: the average cash settlement price per tonne of
copper on the London Metal Exchange (LME) reached
USD 7,950 (Euro 6,181) in 2012, signifying a fall of 10%
on the prior year USD price (-2% in Euro). The year 2012
was marked by lower growth in the Chinese economy,
with diminished growth in demand for the red metal.
Fluctuating between a low of USD 7,252 and a high of USD
8,658, the price was much less volatile than in 2011 (low
6,785 – high 10,148).
• Aluminium: the price of aluminium experienced a
significant 16% USD decrease in 2012, mainly due to greater
availability, also confirmed by the stocks of well over 5
million tonnes in the official warehouses of the London
Metal Exchange. The average price per tonne of aluminium
reached USD 2,019 (Euro 1,570) in 2012, compared with USD
2,398 (Euro 1,722) in 2011.
The Prysmian Group deals with fluctuations
in base metals through strict application
of its hedging policies and daily matching
between purchase and sales commitments.
