As the world prepares for a looming copper shortage, the call for a proactive, innovative, and strategic approach has never been more urgent. Copper demand is set to skyrocket from today’s 25 million metric tons (MMt) to an unprecedented 50 MMt by 2035, according to S&P Global’s The Future of Copper report.
This demand will only continue to surge, reaching an estimated 53 MMt by 2050, primarily driven by the need to scale up power and automotive applications to meet the 2050 Net-Zero Emissions established by The Paris Agreement.
Therefore, it’s crucial that we collectively prepare and navigate this potential crisis with foresight and agility. As an industry-leading copper supplier, we place great importance on our sustainability efforts and helping our customers improve their efforts. To help all in strategic planning for the future, we are sharing these four tips on how to prepare for the looming copper shortage.
How to Prepare for the Looming Copper Shortage
1. Recycle Copper
Sustainability is no longer an option; it’s a necessity. As the metals industry evolves, our customers are increasingly adopting sustainable practices, such as recycling copper. This shift is driven not only by the desire to recover scrap value amid copper’s volatility but also by the collective ambition to contribute to a sustainable future, as outlined in The Paris Agreement.
“Achieving Net-Zero Emissions by 2050 requires the massive deployment of low-carbon power and automotive applications many years before that point,” The Future of Copper report states. These technologies, primarily EVs and renewable energies, are more copper-intensive than their traditional counterparts. In addition, investments in the power grid are critical to support this electrification.
“Overall, these sectors will need an additional 12 MMt per year of copper by 2035. As a result, these sectors will see double-digit annual growth rates in copper demand over that period,” the report continues.
The potential supply/demand gap is expected to be immense. Recycling alone won’t be enough to meet this demand, but it’s a step in the right direction.
“Sustainability is becoming more important in the metals industry than ever before, and we are happy to see many of our customers already taking steps in the right direction. Also, we are excited to help them even more so in the future with our new sustainability initiative in the works,” Three D Metals HR and Safety Manager Gretchen Gutekunst says.
2. Consider a Shift to Aluminum
While the copper shortage looms, alternatives like aluminum are worth considering. Some industries will shift to aluminum, but it’s not a universal solution. Some products require higher voltage, which aluminum is not an option for. Therefore, while this impact may be minimal, in the right applications, a switch to aluminum can help alleviate some pressure on the copper supply chain.
3. Brace for Disruptions and Price Volatility
As you likely know, challenges with purchasing copper are not new. The issue has been brewing, and ignoring the impending copper shortage is no longer an option. Potential disruptions and price volatility likely will be reminiscent of the Covid-19 era.
Therefore, strategize and vision plan for the future now. As demand threatens supply, the repercussions will be felt across many industries.
At Three D Metals, we’re already experiencing these disruptions and are actively implementing our strategic plan to safeguard our customers while fostering our growth.
4. Find a Supplier You Trust
In these uncertain times, aligning with a reliable and transparent copper supplier is crucial. Look for a partner that:
- Keeps you informed about market shifts
- Communicates proactively and regularly
- Supports you in planning for the future
In conclusion, as we navigate the impending copper shortage, the path forward requires collaboration, innovation, and resilience. By recycling copper, exploring alternatives, bracing for volatility, and choosing the right partners, we can not only survive this crisis but potentially thrive in it.