Copper's Bright Future

Kent Kiser is associate editor of Scrap Processing and Recycling.

Looking at some aspects of the market, you might get impression that the metal is trouble. During the second half of 1990, the United States was a net exporter of refined copper, with demand in December 1990 falling to the lowest monthly level in more than four years, according to the U. S. Bureau of Mines (Washington, D.C.). In 1991, copper imports have been declining, and copper stocks on the London Metal Exchange (London) have been building despite production disruptions.

Nevertheless, copper prices, even though they have dropped from 1990 levels, have managed to hold at around $1 per pound, thanks in large part to fears of additional production disruptions. Copper, in fact, is faring the best of all metals in terms of price in the current recession, asserts Bob Lesemann, director of base metals for Resource Strategies Inc. (Exton, Pa.). "Virtually everyone is still making a good profit at today's price," he says.

Moreover, looking at copper's 10 major markets, which account for approximately 80 percent of all copper consumption, six have grown in recent years, one has stayed even, and only three have shrunk, according to the Copper Development Association Inc. (CDA) (Greenwich, Conn.). Copper consumption has grown at the slow but steady rate of 1.3 pet-cent per year since 1973, CDA reports, while copper's usage intensity--defined as pounds of the metal used per unit of measure--has shown even stronger growth since the mid-1980s, especially in the construction industry. Furthermore, the copper industry is examining several possible new markets that could breathe more vigor into the red metal.

Copper, which holds the honor of being one of mankind's oldest metals, is prized for many attributes--corrosion resistance, ability to transfer heat, structural capability, even aesthetics--but mainly for its electrical carrying capacity. In 1990, electrical applications accounted for 61.4 percent of copper and copper alloy consumption in the United States, CDA estimates. Building wiring--copper's number-one market--accounted for 27.2 percent of the metal's electrical applications that year, and that percentage is likely to increase in the 1990s, Lesemann predicts. "The construction industry is becoming more copper-intensive, especially on the building wire side," he notes.

Each year, more electrical amenities--electronics, appliances, security devices, and computers--are incorporated into every new home and office. Most homes in the United States are now wired for 200-amp service compared with 150 amps or less several years ago, CDA reports, which means that more and larger wires are needed to service the structure and there are more circuits, particularly in kitchens.

In addition, the average house size has reportedly increased from 1,700 square feet to more than 2,000 square feet, which also increases the amount of wiring needed. One would think, however, that the current downturn in the housing industry would severely reduce the building wire market. Not so, says Patricia T. Foley of CRU Consultants Inc. (Summit, N.J.), a metals and mining industries consulting firm. She notes that consumption of copper wire is affected not only by the number of housing starts but by the size, construction cost, and renovation needs of individual homes. "Copper is usually associated with quality homes," she says, and as the baby-boom generation and others upgrade and renovate their living quarters, the demand for copper will increase. Therefore, even though there may be fewer housing starts in the 1990s, the building wire market will likely still grow, Foley says.

Aluminum threatened copper in the building wire market in the mid-1970s, claiming a 31-percent market share, but reported concerns about the safety of aluminum wire enabled copper to recapture an estimated 250 million pounds per year of the lost market, CDA says. Copper reportedly now accounts for 87 percent of all building wire used. "The building wire market is nothing but positive at the moment, other than the fact that the housing market is down," says Bill Black, CDA's manager of technical and market data, and the usage intensity of copper in housing should increase in the coming years.

In the plumbing market, copper remains the dominant material used in the United States, thanks to its corrosion resistance and ability to withstand heat and significant water pressure. In fact, CDA estimates that copper accounts for 90 percent of U.S. potable water distribution plumbing.

Once again, Foley believes that renovations and moves to higher-quality homes should stimulate consumption of copper tube in the housing market. The number of bathrooms per house and the size of houses have been growing steadily in recent years, which has increased tube runs, CDA reports. There also has been rising demand for copper tube in fire sprinkler systems in hotels, apartments, health care facilities, and other commercial structures, according to the organization.

Still, copper's dominance in the plumbing market--its second largest--is being challenged by plastics, which Black terms “an ongoing threat.” In the 1970s, copper lost the drainage tube market to plastics because that application did not require copper's pressure-resistance and heat-performance capabilities. As the price of copper rose and as plastic tube technology improved in recent years, plumbers began to use plastic pipes in single-family homes and as water service tubes from water mains to buildings. Plastics, however, are reportedly hampered by failure problems, a susceptibility to permeation by gasoline and other organics, and inferior bacteriostatic properties.

Copper tubing has had its own problems, including the now-discontinued use of lead-containing solders during installation. A threat still remains, however, in the lead content of free-cutting brass rod and cast valves in fittings. The copper industry is seeking solutions to these problems, CDA says.

Electrical wiring in automobiles is what Foley calls a "hot market" for copper, as motorists demand more electronic and electrical amenities in their cars, such as stereos, fuel injection and other computer-controlled engine functions, and power-controlled equipment. Today, the average car contains more than 50 pounds of copper wire and copper alloy strip, compared with 36 pounds in 1980, according to CDA.

The automotive market, however, is a good news/bad news scenario for copper. The quest by the major carmakers to "lightweight" their new cars has made copper lose much of the radiator/nonelectrical market to aluminum. Ford Motor Co. (Dearborn, Mich.) now employs aluminum radiators in almost all of its new cars, while General Motors Corp. (Detroit) has announced that it annually will install aluminum radiators in an estimated 2 million of its North American cars and light-duty trucks. Chrysler Corp. (Detroit) has also explored the use of aluminum radiators, but has elected to use copper and brass radiators in its next generation of small cars, due out by 1995.

Overall, aluminum has cornered at least half of the U. S. radiator market, Black estimates. Not only is aluminum cheaper than copper, but it reportedly has competitive corrosion-resistance and heat-dispersion qualities. To counter aluminum's inherent weight advantage, the copper industry is creating copper radiators with thinner walls, developing more streamlined manufacturing techniques, and exploring lightweight, zinc-based solders. As proof of the industry's progress, Black notes that in 1975 a copper radiator weighed approximately 21 pounds, whereas today it weighs less than 10.

Meanwhile, the Japanese auto industry continues to rely almost entirely on copper and brass radiators, CDA asserts.

The telecommunications market has not been kind to copper in the last decade. The red metal was first given notice that the times were changing when the telecommunications industry began using pulse-code modulation and multiplexing in its systems. Pulse-code modulation breaks down a transmitted message into digital information and reassembles it at the receiving end, a development that increased the message-carrying capacity of copper wire by a factor of 20, says Lesemann. The development thus decreased the amount of copper needed in the system.

Multiplexing is a related process that requires the use of only one wire to transmit information to a junction, where the wire branches into many lines that transmit the information to its final destination. This technology reduced the number of wires needed in the middle of the transmission process-again, reducing the amount of copper needed in the system. As if that weren't enough, the diameter of transmission wires has decreased as technology has improved. It's no wonder, therefore, that after hitting a peak consumption year in 1979, copper use in telecommunications declined at a rate of 8 percent per year between 1980 and 1987, Foley says.

Copper's slide slowed in the late 1980s, however, thanks to the proliferation of fax machines, which required the installation of new telephone lines. Decreased use of copper in telecommunications applications, however, likely will continue--and perhaps pick up speed--in the 1990s, Foley predicts, for one simple reason: fiber optics. Though not responsible for copper's previous losses in telecommunications, fiber optics represent the metal's most serious future threat. Fiber optics have heretofore displaced copper mainly m long-distance lines and heavy-use trunk lines within and between cities. Why? Because fiber optics reportedly transmit more information more quickly and clearly than wire cable and are said to be immune to electromagnetic/radio frequency interference. On the other hand, fiber optic cable is often more expensive, fragile, and difficult to install than copper cable.

Copper's most secure bastion in telecommunications is in the subscriber loop--the lines that go to individual homes. Fiber optics need volume to make it economical to install the cables and the necessary ancillary equipment. Also, the ability of fiber optics to carry voice, data, and television on one line works against it in the home market: Under current regulations, the cable television industry and the telephone/data industry are required to use separate lines and neither industry seems anxious to change the situation, Foley notes.

Even so, fiber optics are beginning to encroach on copper's hallowed home turf, replacing some main feeder lines from central offices, as well as distribution lines to points near groups of customers. While fiber-to-the-home seems economically untenable for the foreseeable future, fiber-to-the-curb is showing possibilities, CDA reports.

Copper will undoubtedly continue to rely on its 10 traditional markets in the 1990s. As Lesemann observes, 'There have been very few new markets that have amounted to a hill of beans in terms of tonnage." But the copper industry is still studying some new applications that could give the metal a lift in the future.

Smart House: This whole-house automation system links the electrical subsystems in a house--appliances, electronics, telecommunications, and security--and enables residents to program, operate, and control them from anywhere in the house via a central processor. The system uses a multiconductor flat ribbon cable that eliminates the need to install separate wires for different electrical systems, as is usually done. The cable also happens to increase the usage intensity of copper in the household. Whereas a typical dwelling contains approximately 200 pounds of copper wire, a smart house uses about 280 pounds-a 40-percent increase.

"It sounds space age, but in fact it's a reality," says Ken Geremia, CDA's communications manager. "It looks like it will be a very good future market. " Others are not so optimistic. Black concedes that the smart house movement could mean a 25-percent "quantum jump" in copper consumption, but he estimates that it will take a decade to fully integrate the technology into the building industry. And Lesemann observes, "Smart house is still sort of a dream. It's not there yet." Home automation in general, however, is becoming a dominant trend in both new and renovated homes, CDA notes.

Natural Gas Tube: Copper is slowly elbowing in on black iron pipe to convey natural gas to appliances in homes. Copper tube costs more than black iron pipe, but its flexibility reportedly makes it easier to install, which reduces labor costs. This market is more developed in Canada than in the United States, Foley says, but some U. S. cities are reporting encouraging growth. Washington Gas Light Co. in Washington, D.C., says that 64 percent of its customers who choose gas also select copper tube for their distribution systems. And Minnegasco Inc., which serves Minnesota, South Dakota, and Nebraska, says that 85 percent of its new gas customers opt for copper tube.

Machine Applications: Free-cutting brass holds promise to replace free-machining leaded steel in products made by screw machines, such as some auto engine parts.

Brass is said to be more machinable than leaded steel, which reduces machine time and tool wear, and it does not need to be plated for corrosion resistance. Also, up to 60 percent of the purchase cost of the brass can be recovered when the brass scrap is sold, CDA says.

High-Temperature Superconductors: CDA considers the use of copper in high-temperature superconductors to be a promising--if futuristic--high-tech application. Copper would be used as the matrix shunt material that surrounds the superconductor and carries heavy currents around faults that occasionally occur in the equipment. In the future, this could be an important new market in transmission lines, energy storage devices, and other applications.

Other peripheral markets could be in marine uses such as ship hulls and sheathing of offshore platforms, electric vehicles, earth-coupled heat pumps, solar energy, and nuclear waste disposal canisters.

With the help of these new markets--and continued growth in some traditional ones-the copper industry seems confident that the red metal will continue its 10,000-year history of useful service and market growth.  •