Despite the gradual decline in sales of electric vehicles, the growing demand for metals such as copper remains intact. EV sales have slowed for various reasons, including concerns about the resale values of the vehicles and a lack of charging infrastructure.
IXM’s head of refined metal, Tom Mackay, states that the evolving market makes it harder to estimate numbers though. He explains that there are plenty of variables in the nascent electric vehicle industry, including battery chemistries and rates of penetration, which make predicting demand a game of guessing.
He adds that while growth in EV sales has reduced, sales are going up, varying from one region to another.
Rho Motion, a consultancy firm, released data showing that sales of plug-in hybrid electric vehicles and battery electric vehicles increased to 13.6 million units in 2023. This represents a 32% increase. The data also shows that in the first and second quarters of 2024, sales dropped by 25% and 22% respectively, compared to the same quarters in 2023.
Copper has many uses, including its use in the wiring of electric vehicles and in batteries, which also contain lithium. Batteries may also contain cobalt and nickel, depending on their chemistry.
Mackay, who manages the copper cathode, lithium, cobalt, lead nickel and zinc books at IXM, explained that huge technological advances had been made in lithium ion phosphate chemistry. With these advancements, Li-ion phosphate batteries could go for 1,000km, with some charging up to 80% in 10 minutes. Prior to this, these batteries couldn’t be used for longer distances.
Li-ion phosphate batteries were first developed for the Chinese market as a cheaper alternative to nickel cobalt manganese batteries. Despite being the cheaper alternative, battery demand in the western world is primarily for nickel cobalt manganese batteries, mainly because of the higher value of recycling these particular batteries.
Recyclability is a crucial factor for auto manufacturers when it comes to deciding on what chemistries to use.
Copper futures are extensively traded on the COMEX, the London Metal Exchange, and on India’s Multi-Commodity Exchange. As of last week, copper futures had declined by more than 2% to reach $4.41 per pound.
Copper is one of the most commonly used metals around the globe, with Chile making up more than one-third of global copper production. Other countries that produce copper include the DRC, Indonesia, Peru, America, China, Australia, Poland, Canada and Zambia. Currently, the biggest importers of the red metal are China, Germany, South Korea, India and Japan.
The steady demand for copper in the EV industry portends well for copper industry actors such as Arizona Metals Corp. (TSX: AMC) (OTCQX: AZMCF) because they are assured of a steady market way into the future as the uptake of electric vehicles accelerates.
NOTE TO INVESTORS: The latest news and updates relating to Arizona Metals Corp. (TSX: AMC) (OTCQX: AZMCF) are available in the company’s newsroom at https://ibn.fm/AZMCF
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