Price forecast: annual copper demand for electric vehicles increases by another 1 million tons

Light electric vehicles with battery packs up to 100kWh use three to four times as much copper as gasoline and diesel-powered equivalents: high-voltage batteries and motors for electric vehicles are 80-85kg, while low-voltage wires in internal combustion vehicles are 20-25kg.

For plug-in hybrids, the total amount of copper is about 60kg, while all-electric trucks with battery packs of more than 180kWh, such as the upcoming Rivian and Hummer, are likely to double that.

In ordinary electric vehicles, less than half of the copper is mainly found in batteries and is mainly used as foil for anode materials.

BMO Capital Markets said in a report that electrodeposited (ED) copper foil is considered the most suitable for battery applications because of its thinness, consistency and light weight.

This has led to a surge in newly announced ED copper foil manufacturing capacity, with an annual production of about 1 million tons announced in 2021 and will be put into production over the next five to seven years, the investment bank said.

BMO said ED copper foil production is mostly made from high-grade scrap, so competition for scrap copper will intensify, while the impact on refined copper is likely to be small.

Wood Mackenzie, an energy and metals research firm, expects terminal copper demand for passenger electric vehicles, including hybrids, to jump from about 600000 tonnes in 2021 to about 2.9 million tonnes over the next decade.

By contrast, the annual mining volume is about 21 million tons, and the total use of scrap copper is nearly 6 million tons.

Copper prices fell on Wednesday, trading at about $4.40 a pound or $9700 a tonne in New York, shrugging off surprisingly strong growth figures in the US and China's re-entry into the stimulus model.