There have been many recent studies of the global copper supply-demand balance. All of them have forecast significant shortages by the early 2030s, which increase in severity as the decade wears on. The cause of this is generally agreed: demand is steadily rising and the supply of mined copper cannot keep pace with it. The solution is also generally agreed: the copper miners have to find ways to increase the supply of mined copper, and, as a supplement, the industry also needs to increase the rate at which obsolete copper is collected and recycled.
There is another way to address these forecast shortages but it receives very little attention. Indeed, half of the above-mentioned forecasts don’t even mention it, and, of those that do, most treat it as having the potential to be at best a minor contributor to the solution. That other way is to use substitutes for copper instead of actual copper. And because aluminium is the best substitute for many of the current end-uses for copper, that means, in effect, that the other way to solve the looming copper supply-demand gap is to use aluminium instead of copper.
A short history of copper substitution
The substitution of copper with aluminium and other materials is nothing new. Back in the 1950s and 60s, when the global economy was in the midst of a metals-intensive urban construction boom, copper was regularly in short supply and substitutes were broadly seen as the solution. During that period, the production of aluminium was growing fast, and it was becoming a lot cheaper. Being a good conductor of both electricity and heat, it was regarded as a prime material to replace copper. So it was that between 1950 and 1975, aluminium’s share of the global wire and cable market grew from a little over 5% to nearly 30%. In automobiles, the weight of copper used in non-electrical applications fell by a third, much of it being replaced by aluminium, and similar shifts were seen in industrial machinery and in buildings.
Then things shifted in the global economy. The materials-intensive economic growth of the Post-War Boom came to an end in the mid 1970s. It was replaced by a different style of economic growth, one which was based on the development of new and improved consumer services involving education, telecommunications, tourism, medical care and finance. These new services were materials-lite, so the demand for metals stopped growing. Instead of averaging 6% growth per year as it had during the Post-War Boom, between 1973 and 2003 global copper consumption grew at less than 2% per year. The need for substitutes fell away. So much so that, at the end of the 1980s, one prominent industry commentator pronounced that the substitution of copper had come to a halt. Three years earlier, two researchers from the Colorado School of Mines had penned an article: Copper And Aluminum Are No Longer Substitutes.
That state of affairs did not last for long. The 1990s saw a resurgence of copper substitution, not because it was in short supply, but because better performance was needed in certain critical end-uses. For example, as part of the quest for better fuel efficiency in automobiles, the heavy brass-and-copper vehicle radiators were switched to much lighter all-aluminium designs. And as the volume of telecommunications traffic increased due to the rise of internet and mobile phone usage, optical fibre cable, which could handle far more transmissions per second than same-size copper cable, began the process of displacing copper in the world’s telecom cable networks.
The next decade saw an intensification of this trend. The driver of this was the industrialization and urbanization of China. When, in the early 2000s, that country burst onto the global scene in search of minerals, the world’s copper mining sector could not respond with the speed required, and substitution was well and truly back on the agenda. In plumbing piping, copper was switched to cross-linked polyethylene (better known as PEX). In a range of vehicle and other household non-electrical end-uses, aluminium once again displaced copper. And, in electrical uses, aluminium (which had lost ground to copper since the 1970s) went from having a share of about 25% of the global cable and wiring market in 2002, to having a 40% share of a much-expanded market in 2012.
These historical examples make clear that aluminium and other materials have played a big role in satisfying demand growth for copper since the 1950s, especially during times of shortage. And the potential for substitution of copper is not exhausted yet. Indeed a recent study has concluded that of the copper consumed globally in 2023, about 60% of it could have been replaced by substitutes with little or no negative net impact on the functionality, reliability and cost of the end-use product. Alloys of aluminium are the best substitute. Indeed they are the best substitute materials for all four of the copper end-uses where the scope for substitution is largest: building wire, utility power cables, cables in renewable power plants and tubing in HVAC heat exchangers.
What's holding aluminium back?
A question must be asked: if the potential for substitutes to replace copper is so high, why are we not seeing more replacement right now? After all, aluminium has important advantages over copper. For one thing, it is far cheaper. The price of the metal in a copper-equivalent coil of aluminium wire costs only 13% of the metal in a coil of actual copper wire. For another thing, aluminium wire is more environmentally-friendly. In those same coils of wire, the aluminium requires less energy to convert it from ore to metal than does the copper wire, and it uses far less fresh water in the process. So, to re-phrase the question: if the cost and environmental advantages of moving to aluminium are so favourable, and the end-use product will perform about the same, then why isn’t everyone using aluminium already?
The answer to this is that there are formidable non-price barriers to making the switch. They can be summarized as (1) regulatory restrictions, (2) copper-friendly engineering specifications and, most importantly, (3) fear that the substitute-containing product will fail. This final barrier applies in particular to both building wire and the tubing in building aircon heat exchangers. It is worth having a closer look at the case of building wire because it sheds light on the origin of these barriers, and shows both how easy and how hard they can be to remove.
The building wire lesson
For building wire, the story goes like this: in the early 1960s, when aluminium was successfully replacing copper in underground power cables, and also in transformer windings, the question naturally arose: why not use it in houses? So it was that, in the mid 1960s, the first homes were wired-up using aluminium, and by the early 1970s one quarter of the new homes in the USA were built with it.
Everyone familiar with the subject knew that aluminium wire had to be treated differently to copper. There were three reasons for this:
- Aluminium wire is brittle so, when solid wire is used and it is flexed back and forth, it snaps far more easily than copper.
- It also expands and contracts much more than copper when heated and cooled, and also tends to permanently flatten when subjected to compressive force. This combination means that when the wire is hot it expands, gets compressed and tends to flatten out, and when it cools this flattening allows it to slip out of its termination point.
- Finally, aluminium forms a non-conducting oxide layer on its surface when exposed to air. This means that when the wire contracts, and some of it’s conducting surface comes into contact with air, that section of conducting surface is lost. When this happens repeatedly, the conducting surface shrinks to the point where a hot spot is created.
All of these issues meant that, for aluminium wire to be properly installed (1) it had to be terminated in all-aluminium termination points, (2) a higher torque, or crimping, had to be used when making the termination, and (3) stranded wire, not solid wire, had to be used. This message did not get through to every home builder and electrician, and so a sub-set of the houses were wired-up without taking these measures. Some of those houses subsequently burned down, leaving aluminium wire with a reputation as a fire hazard. That reputation has persisted to this day. This is despite the fact that, subject to the recommended measures being used, many of the world’s National Electrical Codes permit the use of aluminium wire when wiring-up a building.
Aluminium’s price advantages and environmental benefits are powerless against this bad reputation. After all, using aluminium wire instead of copper might save US$500 in a standard house. This is of little appeal to the potential home-buyer who has discovered, having googled it, the mistaken claim that aluminium wiring is a fire hazard. Similarly long-held, and erroneous, ‘aluminium is potentially hazardous’ beliefs provide the foundations on which are built other barriers to using substitutes for copper.
It is these beliefs which must be addressed if aluminium is going to fulfill its potential to play a big role in alleviating the copper shortage which is on the horizon.
