It is expected that supply in the world copper market will record a “shortage of between 5 and 6 million tons” compared to demand in the medium term, which raises concerns about the energy transition, as the red metal is essential in the transition to the use of electric energy, the main means of reducing gases. Global Warming.
Why is copper important for the energy transition?
An expert in the field says, “When you want to transfer energy inside a car or a building, or between a production plant and a place of consumption, you need to pass the electrical current, and currently we do not have anything better than copper, with an acceptable cost and durability.”
Nexans Group Operations Director, Vincent Desalle, confirmed that the world was forced to rely on electricity to reduce greenhouse gas emissions, which increased the demand for copper.
Europe, in particular, wants to reduce carbon dioxide emissions by 55 percent by 2030 compared to 1990. At the same time, emerging countries are turning to “electricity.”
How is demand evolving?
The International Energy Agency, which is organizing a summit on minerals important for the energy transition this week, confirms that the copper market witnessed growth of about 50 percent between 2017 and 2022, reaching about $200 billion.
Desalle added, “The world was consuming between 9 and 10 million tons of copper about twenty years ago, and currently its consumption is 23 to 24 million tons, that is, the number has doubled in 20 years… We believe that in just ten years, it is likely to reach between 35 and 40 million tons.
In addition to requiring extensive cables to connect offshore wind turbines to the electrical grid, an electric car “generally needs twice as much copper as a thermal car,” Desalle said.
Are we heading towards shortages?
Laurent Chocquely, of the International Copper Association, which includes mining companies and smelters and represents 50 percent of the tons of copper produced in the world, pointed out that data has been indicating for years the possibility of a “shortage in supply.” He stressed that the shortage has not yet occurred, “for various reasons, including the development of prices and the occasional replacement of copper.”
He added that due to the huge growth in demand, “we could face a problem in the early 2030s, with a deficit of about 5 to 6 million tons.”
Are there solutions to avoid shortages?
Many ways have been mentioned to avoid the shortage in the copper market, including the use of aluminum, which is a good conductor of current and does not witness a scarcity of resources, but its supply chain poses difficulties. “Its production requires three different stages, and they are not always in the same geographical areas,” according to Desalle.
In addition, aluminum production consumes large amounts of energy and leads to carbon emissions, and therefore its price depends greatly on energy prices.
“Finally, there is a geopolitical element, which is that one of the largest aluminum producers in the world is Russian, which has created additional restrictions on this market,” he added. One way to avoid a shortage in the copper market is to frequently remember to recycle it.
The International Copper Association estimates that 40 percent of copper currently in circulation is recycled, representing “about a third of the supply annually.”
The importance of this method is increasing in industrialized countries.
While it is difficult to envision 100 percent recycling of copper in the long term since it is often buried in the ground or in buildings, the 40 percent rate could be increased “through general improvement of collection systems and improved techniques for separating copper from other elements,” Shokwali said.
2023-09-28 06:44:00
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