Copper Demand Likely to Increase Due to EVs: WielandBy Alejandro Enríquez | Mon, 10/11/2021 - 09:00
Q: As an expert in copper products, how has Wieland increased its footprint in the automotive sector?
A: It is a very important sector for us. We are a producer and service center for copper alloys and special alloys in North America. In Queretaro, we have a service center that currently is covering the entire country. We are seeing an important transformation. When OEMs started to incorporate more electronic components into their vehicles, our role in the sector grew. We supply the metal to our customers for electric components such as connectors, fuses and other conductors.
During the past three years, companies have arrived in Mexico to invest in local stamping companies to manufacture the precise and complex components that used to be produced in Asia, the EU or the US. We see Mexico as a global platform, especially as more suppliers arrive. Copper is required for different parts of the vehicle. Cooper for automotive sector represent almost 50 percent of our sales volume in Queretaro from what used to be 25 percent three or four years ago.
Q: How are electrified vehicles influencing copper demand?
A: Cooper started to gain importance as electrification trends accelerated. One of our most important customers has already assigned us a project to supply the copper that will end up in automobile chargers.
The industry is heading to an interesting place. OEMs are setting ambitious electrification goals for the next five to 10 years and expect 25-50 percent of their sales to come from electrified vehicles. The amount of copper that will be used will increase considerably from ICE vehicles to electric vehicles. An ICE vehicle uses about 20 Kgs of copper, while an electric vehicle uses between 70 Kg and 83 Kgs, four times more. This is influencing demand for copper and growth projections are high. At Wieland we remain proactive in this regard to support the sector. That being said, projections regarding copper extraction indicate that at this rate it is not likely to be sustainable within two decades.
Q: How are sustainability goals being taken into account when considering the exponential growth in copper demand?
A: The world will experience a supply constraint of copper but the way to approach this problem is through investments in exploration and mines or in alternative operations like recycling, since copper is highly recyclable. Companies should also invest in processing capabilities, considering the market’s increasing consumer trends.
Wieland and many competitors are seeing longer lead times for copper in North America and the EU, which can range from six or seven months to even a year. We are starting to see an increase in demand but fully EV manufacturing is not there yet. Investments, investments and more investments are necessary.
Q: How does Wieland address lightweighting?
A: Wieland continuously innovates and designs new alloys that will allow our clients to meet their specific needs, whether those are increasing conductivity or reducing weight. Wieland has a variety of patents in the market. As a company, we are constantly innovating and open to work with strategic partners to develop new products. We also produce really thin, millimetrically-exact materials with special properties and we help our customers to reduce not only weight but also costs.
Q: What are the trends influencing Wieland’s metal services in the region?
A: Moving forward, our goal is to tackle the increase in demand. We are expecting automotive projects from companies that recently relocated to the Bajio area. We continue to see growth in the automotive and construction sectors. The challenge now is to secure raw materials. The market is very tight and with big supply constraints.
Mexico puts us in a really advantageous position as we can support our customers using metal from US and EU origin, where our metal manufacturing facilities are located. This diminishing supply constraints and enable us to secure metal.
Wieland Metal Services Queretaro is the Mexican Subsidiary of Wieland Group, which specializes in copper and aluminum alloys for a variety of sectors. In Mexico, it is a raw material supplier for the automotive sector.