Relentless Copper Prices Continue to Rise

Relentless Copper Prices Continue to Rise

Relentless Copper Prices Continue to Rise

Author: Kassie Teagarden, Senior Content Marketing Specialist, Lapp Tannehill

Learn the global impacts of rising copper prices beyond the wire and cable industry and how manufacturers and distributors are responding to consumers.


It’s hard to ignore the rising costs and scarce availability of raw materials lately.

Copper, especially, has been a difficult commodity for manufacturers, distributors, and suppliers to get their hands on… much less at a fair price.

Not only are they feeling the global impacts of rising copper prices, but they’re having a hard time explaining to consumers why costs have gone through the roof.

Since we’ve last given an update on skyrocketing prices of wire and cable products, things have only gotten more complicated. Let’s look at the global trends that are affecting the prices of this popular red metal.

Copper Mining Disruptions Slow Production

Scarce supply and high demand equate to higher prices for copper. But why has supply been taking a hit?

Well for one, there was a major slowdown of copper production once the impacts of COVID-19 hit the largest copper mines around the world, putting mining suspensions into place in mid-2020.

Restrictions have since eased and mining production has ramped up again in 2021, but the mining suspensions left a lot of projects in an extended timeline.

Even with the mining delays, Chile and Peru who produce more than 40% of the world’s copper, mined a combined total of 7.9 million tons of the metal 2020 compared to a combined 8.2 million tons in 2019.

In the meantime, according to Thomson Reuters, global copper mine production is forecasted to accelerate from 2.1% in 2021 to 3.9% in 2022 due to an overall increase in mining projects.

Although it may not seem like mining production had taken a big hit, the delay may have repercussions down the road and we’re noticing it today with high copper prices.

Where are copper prices right now?

As you can see on the copper prices graph below, in the last year copper prices have fluctuated but have overall continued to rise higher than we’ve ever seen.

For reference, copper prices were at $3.06/lb on October 28th of 2020; $4.14/lb on April 14th, 2021; and $4.44/lb on October 28th of 2021.

As it was predicted that 2021 that we would see an all-time high for copper prices – the same forecast is in queue for 2022 and beyond.

 What's the difference between COMEX vs Omega-Camden Copper Prices?

Minnesota Wire states that Michael Widmer, a commodity strategist for Bank of America recently told CNBC, “If our expectation of increased supply in secondary material, a non-transparent market, did not materialize, inventories could deplete within the next three years, giving rise to even more violent price swings that could take the red metal above $20,000/t ($9.07/lb).”

To put it simply, copper mines are having an extremely difficult time keeping up with copper demands. Copper consumption is predicted to surpass its production in the next few years.

The copper supply gap is predicted to emerge in the second half of the decade… and shortages may be on the horizon.

COMEX Copper Prices
 Copper Prices from November 2020 – November 2021

 

Graph indicating upwards tick in copper pricing from November 2020 – November 2021

Erik Heimlich, a senior copper analyst at CRU Group (a privately owned business intelligence company focused on global mining and metals), says the supply gap is expected to require more than $100 billion of investment including an increase in capital costs of new copper mines from 10% to 25% (S&P Global).

Forbes further states that if the copper industry does not invest in more than $100 billion, then it will be very difficult to avoid an annual supply deficit of 4.7 million metric tons by 2030. If the investment is not made, then copper prices will continue to soar.

Transitioning to Zero Carbon Emissions for a Greener Infrastructure

Behind silver, copper has the most conductive properties of any metal in the world, making it a hot commodity for power generation, electricity transmission, and heat exchange.

And what’s even better? Copper is 100% recyclable... which makes it the perfect metal for a sustainable and energy efficient future.

Finding alternative energy sources for a greener infrastructure has become a top priority around the world – and leading countries such as the U.S., Europe, and China have been looking closely at ramping up electric vehicle production in the upcoming years.

Prime Minister Boris Johnson announced that by 2030 the U.K. will completely stop the sales of all new diesel and gasoline vehicles and opt for only electric vehicles instead. They’re not the only ones with ambitious goals of transitioning to zero emissions.

Norway’s new government policy is looking to reach zero emissions with electric or hydrogen alternatives as early as 2025; the European Union, which makes up 27 states, has a phase-out schedule by 2035; the U.S. is set to achieve net-zero emissions by 2050; while China’s commitment to zero carbon emissions is set for 2060.

With the world’s leading countries focusing on reducing the impacts of climate change and transitioning to zero carbon emissions in the foreseeable future, the demand for copper is high.

Copper is used throughout the body of electric vehicles, in electric vehicle charging stations to connect the charger to the electrical panel, and in the charging cable itself.

According to the Copper Development Association, the average amount of copper needed in a hybrid electric vehicle (HEV) is 85 lbs; a plug-in hybrid electric vehicle (PHEV) is 132 lbs; a battery electric vehicle (BEV) is 183 lbs; a hybrid electric bus is 196 lbs; and a battery electric bus is 814 lbs.

 Copper Needed for Electric Vehicles

Copper demand will be high for the foreseeable future – the question is whether we will be able to keep up with that demand with all the determining factors of copper mining projects, industry funding, the political climate, sustainable energy efforts, and more.

How Are Copper Prices Affecting the Wire and Cable Industry?

Lapp Tannehill is working diligently to keep an open line of communication between our suppliers and our customers on pricing updates, inventory management, and replenishment efforts to reduce the risk of shortages that we’re seeing in the wire and cable industry.

Brian Arickx, our Director of Supply Chain at Lapp Tannehill says, “We’re seeing price increases across the board… and suppliers are sending us these updates on the fly that are oftentimes effective immediately."

"This puts us in a position of quickly having to adapt to changes on open orders and updating our website prices as quickly as possible. It’s a challenging time for the wire and cable industry but we’re trying our best to stay ahead of it.”

Here are a few resources that may help Purchasing save money on wire and cable:

We recommend that you stay in touch with your sales representative at Lapp Tannehill or if you have yet to do business with us – reach us on live chat to speak with an inside sales support member who can help with pricing questions, product availability, or recommended product substitutes.



Need a Quote?

Our quick quote form is an easy way to get you the information you need to keep your project on track.

If you still have questions, chat with us online or call us at 800.633.6339. Our customer service representatives are available to answer questions Monday through Friday, 8am - 5pm CST.

Start Your Quote

Customer Portal | Online Account Management Tool for Current Customers     Log In

Copyright © 2013-2017 Magento, Inc. All rights reserved.