How to control costs with rising copper prices

How to control costs with rising copper prices


Rising Copper Prices


Copper has been a valuable material for thousands of years, but now rising demand has pushed its price close to a historic high.

The material is used across many industries – from power generation to automotive – and its rising price is driven largely by the move towards electric vehicles (EVs). Copper is used widely in EVs, in components such as the battery, for connectors, and in the charging stations that pump energy into the car. The Copper Development Association says copper is “essential” to EV technology: a conventional car might use up to 50 lbs of copper, a hybrid around 85lbs and a full electric vehicle more than 180 lbs, it says.

Electric Vehicles are driving up the price

This higher demand has propelled copper prices close to an all-time peak near $8,000 per tonne – with the likelihood of it rising even higher. The EV industry currently accounts for just 1% of copper demand but, according to analysts, this could reach up to 10% by 2030 causing EV car manufacturers to fight for limited copper resources. Higher prices will push up the cost of components – raising the price of the final vehicle.

Copper parts and components such as connectors are usually machined from mill-supplied tellurium copper rods or bars. Like all materials, though, copper is supplied in a variety of grades. A cheaper alternative is oxygen-free copper wire. This combines the necessary electrical conductivity and chemical purity for EV components, yet at a lower price.

While copper wire cannot be machined in the same way as a rod or bar, it can be processed using another method – called cold forming – to create parts such as connectors. Despite its lower price, oxygen-free copper – when processed by cold-forming – can produce better results than conventionally machined tellurium copper for certain applications.

The lower price of oxygen-free copper is one obvious advantage but there are other benefits to using cold forming as a technique. Firstly, it creates around 80% less waste than conventional machining. Rather than starting with a block of copper – and milling a smaller component from it – cold forming starts with almost the exact amount of material needed.

The process works by forcing copper into a die at high pressure. Because of its relative simplicity, cold forming has traditionally been used to make low-cost components such as rivets and fasteners. However, it is also capable of making precision parts – at high volume. Other advantages can include faster lead times, a better surface finish and improved mechanical characteristics.

Electric Vehicle components take the cold forming route

A good example of how cold forming has been used in the EV industry can be seen in power connectors. These components are critical in electric vehicles, because they improve efficiency. Power connectors are widely used in charging units and in the motors that drive each wheel. Manufacturers are keen to improve their efficiency – in order to minimise power losses – while reducing weight and cost. Cold forming has helped them achieve this.

Connectors are precision components, and cold forming allows dimensional tolerances to within plus or minus five microns. At the same time, it can offer fine surface finishes, which typically require no further machining or polishing.

Parts also undergo work hardening during the cold forming process, which further improves their machinability and durability. This reforms the metal’s structure in a way that prevents further dislocations, leading to a stronger component. The increased strength is comparable to that achieved by heat treating. The difference is that cold working of a less costly material is more cost effective than hot working of a more expensive metal, especially when a precision finish is needed.

The ability of cold forming to process a cheaper grade of copper into high-quality components will be a key factor in controlling cost as the EV market continues to expand.

Find out how Dawson Shanahan can reduce costs further in our guide through the engineering tooling process here: