CESCO Wrap-Up: Thoughts from Santiago

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In 2022, the CRU World Copper Conference, which ran as part of CESCO Week in Santiago, Chile, delivered a compelling program spanning current trends in the copper industry, from responsible production to market intelligence.

The delegates in attendance included C-suite participants from the world’s most important mining and smelting companies, policy experts, media and analyst organizations. More than 500 people from around the world attended the hybrid event. ICA’s session on the “Future Energy Transition” focused on topics related to copper demand and had 140 attendees.

The event presented an opportunity for ICA to share its latest commissioned research and insights on topics affecting the future of the copper industry. The research provides answers to critical questions for the industry on topics such as the expected impact of future substitution and miniaturization, the growing demand forecast, details on autonomous EV development and growth in the large cable demand market. This portfolio adds to the existing bank of research from the ICA’s Market Intelligence team, which explores ongoing trends and contributes to the demand conversation.

Key Takeaways

Ernest Scheyder, Mining and Future Energy Correspondent at Reuters, returned to moderate the session. Four independent experts joined Ernest to present their latest research projects and take part in the discussion. Some interesting insights follow.

World Substitution Impact for 2022

Krisztina Kalman-Schueler of DMM Advisory presented ICA-commissioned work on global substitution, a staple of ICA’s offerings at the World Copper Conference. Krisztina found that substitution remains limited as a result of copper’s ability to provide the best cost-performance combination for a wide range of applications. In 2021, the substitution rate for copper accounted for only 1.32 percent of total global copper demand. The rate is predicted to stabilize in 2023 following a further predicted limited increase in 2022.

When discussing miniaturization, with applications such as electronic devices, A/C and refrigeration tubing reducing in size, Krisztina explained that this is a positive sign for copper demand. Miniaturization allows applications to continue to benefit from copper’s superior properties in newly updated technologies, avoiding further substitution.

Offering insights from an industry perspective, Luis Gerard of Frigus Bohn discussed an expected demand increase for copper tubing in the A/C and refrigeration industries. Demand is expected to grow three to five percent in the U.S. and five to eight percent in Mexico for these applications.

New and Emerging Power Cable Demand

John Connor of SAI Industrial, LLC, explored the latest insights on copper power cables used in solar, wind and electric vehicle infrastructure applications, as well as expected demand trajectories. Demand for copper power cables is set to rise to more than 8.7 million metric tonnes by 2035 as the market expands by a compound annual growth rate (CAGR) of 4.5 percent, an increase supported by copper’s high conductivity and energy-efficient properties.

In considering key factors that would continue the trajectory of growth in copper demand for power cabling, John highlighted both increasing populations and growth in renewable energy generation as opportunities. For the latter, his projections included upgrades and replacements for existing grid infrastructure, where copper is the material of choice due to its natural properties.

The Role and Demand for Copper in the Future Automotive Market

Presenting new research on future demand in the automotive market, Luke Gear from IDTechEx shared research predicting the copper needed for car components will rise to six million tonnes annually by 2040. The shift in the automotive market dynamics, with a decline in internal combustion engine (ICE) vehicles sales by 2037, points to a positive future for copper demand.

As the number of electric vehicles (EVs) increase, so will copper demand. Luke explained EVs require more copper for motors and batteries, and autonomous vehicles require more copper for their multiple radars, lidars and cameras, pointing to a positive outlook for copper demand in the automotive sector.

Looking ahead

As the conference demonstrated, copper demand will be influenced by its use as a green material in applications supporting climate action. ICA’s research supports the industry’s understanding of this trajectory.

With limited substitution and increasing demand anticipated for autonomous and EV development, as well as for power cables in new and emerging applications, the outlook for copper appears positive. As these applications continue to grow, the industry is prepared to meet this demand through a combination of mining (primary production) and recycling processes (secondary sourcing).

Until next time

More information about ICA’s workshop at the CRU World Copper Conference can be found here and a recording is available here. Please reach out with any questions and be sure to follow ICA’s social media accounts, @ThinkCopper and LinkedIn, for the latest news.

 

About the International Copper Association

The International Copper Association (ICA) brings together the global copper industry to develop and defend markets for copper and make a positive contribution to the UN’s Sustainable Development Goals. Headquartered in Washington, D.C., ICA has offices in three primary regions: Asia, Europe and North America. ICA and its Copper Alliance®️ partners are active in more than 60 countries worldwide. For additional information, please visit www.copperalliance.org.

 

25 April 2022

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Colin Bennett

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