On February 19, the March copper price on the New York Mercantile Exchange rose to US$4.0910 per pound (US$9,019.16 per ton), a new high since September 2011. This is the third consecutive week that copper prices have risen, and they have risen by nearly 15% in 2021.
Copper is the core metal of clean energy, and copper has the same natural and same “renewable” gene as renewable energy. It is expected to become the most demanding metal in the future.
What is clean energy?
Clean energy, also called green energy, refers to energy that does not emit pollutants and can be directly used in production and life. It includes nuclear energy and “renewable energy, such as solar energy, wind energy, biological energy, water energy, geothermal energy, and hydrogen energy, etc.
What is the relationship between clean energy and copper?
The six main cooper applications include construction, power infrastructure, industrial motors, household appliances, transportation, and electronic information.
Copper has become an indispensable material in clean energy power generation systems and many energy-efficient equipments due to its excellent electrical and thermal conductivity, ductility, strength, durability and 100% recyclability.
With the transition from energy-inefficient products to energy-efficient products, the amount of copper in these products has also increased, such as from traditional power generation to new energy power generation, and from internal combustion engine vehicles to electric vehicles. Clean energy technologies are also emerging, including innovative solutions using copper materials, such as high-efficiency cast copper rotor motors and copper heat exchangers in new energy vehicles. In the future, the production of new energy vehicles and supporting facilities driven by the electrification of transportation infrastructure, the construction of smart cities and green buildings, the improvement of electrical safety and energy efficiency of electrical appliances, and the growth of demand for electronic products and home appliances will all become the driving force. New application areas for copper demand growth.
Offshore wind power consumes 15 tons of copper per MW installed. Wind and solar energy on land require 5 tons of copper per megawatt of installed capacity, of which a single wind turbine requires 862 kg of copper. The traditional coal-fired power generation system requires only 1 ton of copper per MW of installed capacity.
An electric car needs more than 60~83kg of copper, which is four times the 15~22.5kg of a traditional internal combustion engine car. According to a report by Morgan Stanley, the demand for copper in electric vehicles will account for about 2.4% of copper production in 2020.
What about the global supply of copper?
Due to the lack of new copper ore discovery, the timeline for putting the deposit into production is also longer. For large mines, the average is 10 to 20 years. At present, there will be no significant increase in copper output in the next 10 years.
In a report released in January this year, the International Copper Research Group (ICSG) announced preliminary data for October 2020. According to the report, between April and May 2020, world copper mine production fell by 3.5%. The agency said that the two months were most affected by the global lockdown related to the epidemic, which led to temporary closures of mines and a decline in production levels. ICSG also reported that preliminary data show that in the first 10 months of 2020, global refined copper production will increase by 1.5%, but global refined copper usage is expected to increase by 2% over the same period. This indicates that due to strong demand in China, the global “significant shortage” is about 48 million tons.
As the economy gets rid of the epidemic and the global squandering of power infrastructure, output will not be able to match the accelerating demand growth, and power infrastructure cannot be built without copper wires and cables. Citigroup analysts also believe that starting this year, the global copper gap will be around 500,000 tons.