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Nolan Johnson spoke with Michael Coll and Chris Stevens of Nippon Denkai, home of the last-standing ED foil manufacturer in North America, about the demands and projections they’re seeing in the copper market currently.
Nolan Johnson: There’s plenty of news about the market demand for copper, that the demand far outstrips the current manufacturing, and that demand will only grow. You must have a good perspective on that. Can you give us and our readers an overview?
Michael Coll: Sure. We look at the copper market from the perspectives of both our supply and our customers’ demand. Electrodeposited foil starts with dissolving recycled copper wire in acid prior to electroplating the copper into sheet form. The recycled copper we use comes from a large network of scrap vendors that we’ve worked with for well over 30 years. When we look at the supply side of the equation, we have not experienced any issues receiving the scrap copper that we need to meet customer demand.
Through the first quarter of the year, copper prices increased at an unparalleled rate, however, prices have declined rapidly due to the release of strategic reserves in China. While our supply is stable, our customers are communicating that the copper foil supply has tightened, specifically in Asia. This is due to the combination of increased orders in the electronics industry as we emerge out of COVID, combined with increase demand for lithium-ion batteries (LIB) for electric vehicles.
Chris Stevens: Our customers are clearly communicating that the emphasis on shifting copper foil production from PCB to lithium-ion batteries for EVs is putting a strain on the foil market. The two competing industries both have significant demand, and foil suppliers are looking at how to allocate their capacity between the PCB and LIB businesses. A big part of this is the excitement around EVs and the opportunities that the emerging market segment has to offer in the future. It is more attractive as a newer segment than what printed circuit boards have been historically, and we hear there is conversion of existing capacity for PCB applications going into LIB.
Johnson: Let’s start with how most of your copper comes through the process of recycling.
Coll: We start with bare bright number one copper, which comes from end runs from wire mills and recycled industrial wire. It can be wire that was harvested out of buildings during remodels or from downed power lines—virtually any copper wire that is used for electrical transmission. We dissolve the wire in sulfuric acid to create the electrolyte used for plating the copper foil into continuous rolls.
We are the only ED foil maker in the U.S., so we are not competing against other foil makers; the same copper we use is also recycled into rolled copper, new wire, and tubing for plumbing. In terms of recycled copper demand, we have lots of competition. One of the areas increasing demand on copper wire is infrastructure build-out, and not just related to electronics, but to new home and building construction. We have heard of shortages in traditional Romex wire and cable for new home construction, as well as other large municipal investments. As we emerge from COVID and the overall economy grows, multiple industries will additionally strain the supply base. As I mentioned, there is not a lack of supply, but the demand is certainly forcing an increase on copper price.
Johnson: When lay people like me think about copper production, we naturally think about more mining. Where is the greatest potential to help increase our supply of copper into the overall market? Is there more potential for recycling? Or do we have to mine significantly more to add to the supply?
Coll: We do have some longer-term concerns when considering the astronomical growth projections for electric vehicles. This will have an incredible impact on the copper market as there are requirements for copper foil for the batteries, charging cables, and the infrastructure for charging stations. This will require more copper to be mined worldwide. We understand there was quite a bit of difficulty last summer with some of the larger mines in Chile having worker issues due to the health and safety requirements related to the pandemic. Production appears to be returning to pre-pandemic levels, but to increase the capacity at a copper mine is a multiple-year effort. Additionally, some of the large mines report that the quality of ore is not as rich as it used to be, resulting in reduced output. We are concerned longer-term, especially, with the market projections which require doubling or tripling the amount of copper use annually to meet global needs for infrastructure improvements, in addition to growth in PCBs and EVs. We just do not know where all the copper is going to come from.
We are very interested in the concept Tesla has proposed: recycling all the components from old batteries to build new ones. Once the EV industry is at a steady state of battery production, this would be ideal. However, we are years away from steady state, so it appears that in the future a supply constraint will be inevitable.
To read this entire interview, which appeared in the July 2021 issue of PCB007 Magazine, click here.