Copper Demand to 2035

Global Industry, Markets & Outlook 2019

Copper — The Electric Metal

In 2000, 60% of global copper consumption was directly related to its electrical conductivity properties. The balance was accounted for by its properties of thermal conductivity, machinability, malleability, aesthetics and signal transfer. However, by 2017, electrical conductivity had grown to represent over 75% of the over 30M tonnes of world copper demand in all forms (refined consumption and direct scrap use).

Global electricity consumption growth to accelerate, boosting copper demand

A growing proportion of copper’s usage is in electrical end use markets where its properties are harder to replicate and substitute with alternative materials. As a result, per capita copper demand in the future will be more secure and grow at a faster rate between 2.5-3.0% per annum in the years to 2035.

Electric vehicles (EVs) lead the charge

The rapid growth in EV sales and fleets is one area where world electricity consumption will begin to accelerate. In 2017 global EV sales reached 1.1 million units, a 54% year-on-year increase although only 2.2% of all new auto registrations. Last year the world EV fleet grew to 3.1 million units, and the number of charging stations to 3.5 million. Electricity charging demand has increased from 34 Terra Watt Hours (TWH) in 2015 to 45 TWH in 2016 and 54 TWH in 2017. One projection suggests that the world EV fleet will increase to 13 million units by 2020 and 130 million by 2030.

EVs driving rising intensity of use of copper

Depending on the size and type of EV, copper content is set to double or triple compared to the typical 23Kg used in an ICE automobile. Hybrid EVs (HEVs) used more copper than ICEs, Plug-In HEVs (PHEVs) use more copper than HEVs, and Battery EVs (BEVs) consume more copper than PHEVs. All other things being equal, a trend towards bigger EVs, larger batteries and increased range will tend to be favourable for higher copper content. EVs have more complicated wiring harnesses, extra motor windings and copper anode foil (for batteries).

The automotive wiring harness industry is already booming

Due to the auto megatrends of connectivity, electromobility and autonomous driving, wiring harness manufacturers such as Lear Corporation are now seeing and forecasting an ongoing 5% increase in electrical content per year on top of the growth in unit auto sales. The wiring harness industry is enjoying buoyant sales, rising profits and strong capital investment in new plants and has the biggest order book in its history. High voltage harnesses for EVs are already a contributory element of this. It is also likely that these harness suppliers will also grab the dominant market share of the associated charging cable business.

Establishing the copper components supply chain for EVs

The first steps are now being taken in Europe to build out the supply chain necessary to support the expected growth in EV production. Unlikely wiring harnesses, where labour intensive production economics dictate that assembly must be done in more remote low labour cost countries, the production of heavy electric motors with enamelled copper windings, and copper foil for Lithium ion battery packs, will take place close to EV assembly lines to maintain JIT supply. Doosan is building a 50ktpy capacity battery copper foil plant in Hungary.

More copper for electric motor windings and charging station cables

Superior Essex is building a new winding wire factory in Serbia (probably the first greenfield winding wire plant built in Europe in the last two decades) to serve automotive OEMs which opens in Q4 2018. It has also licensed flat wire technology from Furukawa Electric in Japan that enables motors to be smaller and more tightly wound so that they can be both more powerful and efficient. Leoni of Germany is also investing in its ‘factory of the future’ in Roth. A large part of its output will be charging cables for EV stations. The increase in copper consumption resulting from the EV revolution is not just the copper in EVs themselves, but also in charging station cables enabling them to recharge by connecting to the low voltage distribution grid. Investments such as these (which will also be required in North America) may mean a partial recovery in first use copper consumption in mature industrial economies, reversing the underlying trend. Eventually the growth in remote charging will require the reinforcement and upgrading of the local electricity distribution cable network.

World demand is significantly underestimated

It is strongly suspected that existing statistical sources have underestimated the scale of world copper consumption by at least 5%. This is because much of the growth over the past decade has occurred in parts of the world where accurate and reliable data is absent such as China, ASEAN, India and the Middle East. This new Roskill report will address these shortcomings. If the world copper industry is larger than commonly thought then this has major implications for prices, the secondary sector and refined producers and copper miners.

Developing a consistent and reliable series of scrap data is a key objective of the report

This new study will seek to accurately define the volumes and dynamics of scrap use in the demand side of the global copper market. Understanding the volumes of direct scrap use will improve the forecasting of world refined copper consumption, and ultimately dictate the need for new greenfield mine projects to meet the predicted growth in copper demand.

Roskill experts will answer your questions…

  • How much additional copper demand will come from the expansion of EV assembly?
  • How large really is copper consumption in China? How fast has it been growing in recent years?
  • What are the short, medium and long term prospects for copper demand in China?
  • How quickly will consumption grow in Brazil, ASEAN, India, Turkey, North Africa and the Middle East?
  • What role will scrap play in the future? What are the implications for other copper raw materials?