Growing EV Infrastructure To Drive Copper Demand For Decades Says WoodMac
(Kitco News) - Growing fears of a global economic slowdown continue to weigh on the copper demand, but one research firm sees potential growth as demand grows for electrical vehicles.
Although electrical vehicles (EV) demand more copper, Henry Salsibury, research analyst at Wood Mackenzie, noted that the potential infrastructure growth is a bullish factor for the base metal.
In a report released Monday, Salsibury said that more than 20 million electric vehicle charging stations are expected to be deployed globally by 20230, consuming 250% more copper compared to 2019.
"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,” he said in the report. “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.”
According to the research firm, coppers physical properties make it the best base metal to conduct electricity and accommodate the higher temperatures common in electric vehicles. While aluminium is the closest alternatives, aluminium cables need to have a cross-sectional area that is double the size of any copper equivalent to conduct the same amount of electricity, the company said.
"Copper is a cornerstone of the EV revolution. At the heart of the electric vehicle, it is used throughout because of its high electrical conductivity, durability and malleability,” Salsibury said. “The need for copper is even more significant when it comes to charging stations and supporting electrical grid infrastructure.”
Along with meeting growing infrastructure demand, Salsibury noted that electric vehicles consume about three times more copper than internal combustion engines (ICE).
“The amount goes up as the size of the vehicle increases. For example, a fully electric bus uses between 11 and 16 times more copper than an ICE passenger vehicle - depending on the size of the battery and the actual bus,” he said. ““By 2040, we predict that passenger EVs will consume more than 3.7Mt 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.”
The report comes as copper prices struggle to find momentum after falling to a two-year low at the start of the month. September high-grade copper prices last traded at $2.5815 a pound, down 0.29% on the day.