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Copper Update

The EVs are still coming

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MCN Editor Dan Markham According to the Copper Development Association, a pure electric vehicle might contain more than a mile of copper wiring in its stator windings.

Of all the issues affecting the global copper market in the coming year, perhaps none occupies such game-changing status as the increase in unconventional motor vehicles. For decades, the internal-combustion engine has been the driving force in virtually all on-road machines, from the compact car to the semi-trailer, enduring the occasional predictions of doom whenever gasoline prices climbed.

But the push away from the gas-powered vehicle is now ongoing, prompted as much by global environmental concerns rather than high prices for oil. Hybrids, battery-electric vehicles and even more advanced technologies have arrived, and their use will only speed up in the coming months. This will have a profound effect on the copper market.
 
The closer a vehicle moves to full electrification, the better the news is for the red metal.  According to the Copper Development Association, the hybrid electric vehicle, the first mass-produced alternative to the conventional car, offered 85 pounds of copper per vehicle, up from 20 to 50 pounds found in the traditional passenger car. The next step up, the plug-in hybrid, demands 130 pounds of copper, while the battery electric vehicle requires approximately 180 pounds. 

The increases are even more impressive as the vehicle gains in size. A hybrid electric bus uses 196 pounds of copper. A single battery electric bus can contain upwards of 800 pounds of the material. 

Demand for these products is on the rise. At a recent webinar sponsored by CRU, ID TechEx Senior Technology Analyst Luke Gear said copper usage in the transportation market will skyrocket. In 2020, the global automotive industry uses about 68,000 metric tons of copper per year. In just 10 years, that number will grow to 250,000 tons per year. “That’s predominantly from cars, but also other on-road segments such as two-wheelers, trucks and buses,” he said. 

Of those other segments, buses pose one of the best options for adoption of electric vehicles. It’s a trend taking place throughout the world at varying speeds, said Marcin Seredynski, from Volvo’s E-Bus Competence Center. China, for instance, already has 400,000 electric buses, compared with just 200 in Europe. But as charging stations and other infrastructure improves, Seredynski sees growth in all major markets, including the United States. 

In the electric vehicle, copper is used in motors, plus batteries, inverters and wirings. Moreover, the figures detailed above don’t include the copper that will be required in the network of charging stations that will be needed as the fleet of electric vehicles grow.
The reason for copper’s growth in these applications is “because of its unmatched combination of durability, malleability, reliability and superior electrical conductivity,” according to the CDA.

Interestingly, there is one trend working against copper in the trend line. Copper batteries tend to come in two types – with or without permanent magnets. While both use copper far more than the internal combustion vehicle, the vehicles without magnets employ it in more places. 

Currently, those induction motors have a greater share of the market. But the advantages of batteries with magnets, greater efficiency and power density leading to greater range, will shift the balance toward that type of vehicle in the years to come. 

“What this means, is that although we’re transitioning toward a motor type of lower copper density, given the sheer demand for these types of motors, overall we’re going to have a huge rise in demand for copper,” Gear said. 

“We’re really at the early stages of the electric car market. Battery-electric cars have proven themselves to be successful products. There is demand for them and governments are now getting behind them,” Gear said. 
On the other hand, it will take slightly longer to make serious inroads in some other transportation segments, he said. 

“In this decade, we don’t have the energy storage technology to enable some of the electrification of more heavy-duty or energy demanding segments. The most obvious example if aircraft,” he said. “We think there will be an emergence in those technologies that will start to enable new wave growth for those alternative applications beyond 2030. ?

[Sidebar:]

CBSA Deals with Phases of COVID-19
The Copper and Brass Servicenter Association’s Annual Convention was one of the first casualties of the novel coronavirus.  All of the arrangements were made, hotel rooms booked and speakers lined up for the late March event in Texas, but the meeting would never come to pass.
Since then, the only trade organization for red metals distributors has been feeling its way through the pandemic, learning how to serve its members on the fly. 

CBSA Executive Director Susan Avery outlined just how the association has evolved through the first four months of the pandemic. 

“For the first six to eight weeks, we pivoted to becoming that resource for our members on all things COVID, which was anything from sharing information on the CARES Act to providing links on shutdowns, as they were state-by-state, city-by-city.  We developed a single page where we posted everything we could get our hands on, so they could literally have a one-stop shop,” she says.

For the members, most of whom were deemed essential businesses, the focus was exclusively on getting through. They needed information on how to operate safely, which involved questions on cleaning and other measures that had never been a priority. Likewise, they were learning on the fly how to manage a workforce where many were working remotely. 
After those first two months of uncertainty, the members finally began to look outside the walls a little bit. “The second phase was getting members to talk to members,” Avery says.
 
In a lot of ways, as the pandemic was a business condition no one had ever experienced, those initial conversations were attempts to gauge whether an individual company’s experiences were unusual. Additionally, there was more in-depth conversations on how to navigate the tricky experience of managing facilities when the conditions might differ from one jurisdiction to the next. 

Exacerbating the issue for some of the members was the fact the pandemic was preceded by the pricing tumble in the oil and gas market, which hit some of CBSA’s membership more acutely than others. 
“They wanted to talk about what was going on in some of the markets, and whether what they were experiencing was normal.”

Finally, the membership has morphed into Phase 3 – planning for the future. “After they got their fill of talking to each other, they were thinking long term. What is the recovery going to look like?”

CBSA maintains a long-standing relationship with ITR Economics, a firm that provides the group with analysis of business conditions. A forecast by an ITR Economics speaker is always a highlight of the annual convention, but the members were deprived of that this past March. The solution was to bring a virtual keynote to them, but only when they were ready to receive it. 

“I think a critical thing is keeping the pulse for where the members are. If we tried to do that in April, when our members were so mired in the details, it wouldn’t have been successful,” Avery says. 

Looking further ahead, CBSA’s first in-person event post-pandemic is still on the schedule, a service center training session and mill tour in October at NGK Berylco in Sweetwater, Tenn. Obviously, the coronavirus will ultimately determine whether the event goes on as planned, though rescheduling it would not be as difficult as trying to do the same with the annual meeting.