While copper as an industrial commodity hasn’t seen an increase in price in comparison to other metals, such as gold or even the highly volatile nickel, experts are predicting that prices for the red metals should surge as demand drastically overwhelms current supplies.
Further confirmation of this came on Monday when a new report proved showed that the electric vehicle market alone will need over 250 percent more copper just for the charging stations.
According to a Scottish consultancy firm Wood Mackenzie, there will be over 20 million electric vehicle charging stations by 2030, representing a drastic increase in copper demand. In North America alone, the EV infrastructure market will total $2.7 billion by 2021 and will reach as high as $18.6 billion by 2030 according to the report.
“By 2040, we predict that passenger EVs will consume more than 3.7 million tonnes of copper every year. In comparison, passenger internal combustion engine (ICE) vehicles will need just over 1Mt. If we look at cumulative demand, between now and 2040 passenger EVs will consume 35.4Mt of copper – around 5 Mt more than is required to meet current passenger ICE demand,” said Henry Salisbury, WoodMac research analyst. “As it stands, range anxiety – worrying that a battery will run out of power mid-journey – is a key psychological barrier standing in the way of more widespread EV adoption. One way to address this is to roll out more charging infrastructure. As this happens, more connections to the electrical grid will be required and more copper will be needed as the network expands.”
At the moment, less than 1 percent of the world’s vehicles are electric, but this is estimated to grow as drastically as up to 11 percent of new car sales by 2030. While this means charging stations are growing to explode in popularity, even copper consumption from the perspective of the vehicles themselves will grow.
An average gas-powered car uses around 20 kg of copper, primarily as wiring. A hybrid car takes around 40 kg while a completely electric car needs as much as 80 kilograms, of 176 pounds, of copper. This becomes even more exacerbated the larger an electric vehicle is, as a fully electric bus takes between 11 to 16 times more copper than a regular gas-powered bus.
Overall, the consensus is that copper demand will spike by between 3 and 5 million tonnes over the upcoming decade. Once the demand for electric vehicles truly kicks into gear, this estimate would reach as high as 11 million tonnes of new copper just for EV’s alone.
While a game-changer in and of itself, the EV market isn’t the only sector that’s going to demand much more copper in the years to come. Green technologies also need copper as a key element and as many major energy companies vow to begin transitioning to green energy sources over oil and natural gas, demand for the red industrial metal could reach a fever pitch never seen before in recent history.
As a long-term play, the copper market seems like an excellent investment opportunity for those who are patient and willing to wait to see the results unfold.