DS-MAR22-PG35:DS-NOV21-PG43 17/03/2022 13:51 Page 1
Like all parties involved in
the product category, Aerco is currently experiencing extended lead times and rapidly rising prices. Over 90% of cable and wire products used in its markets use copper as the conductor, and it is the condition of the world- wide copper commodity market that is driving these difficulties. It is not the case that the
industry is running out of copper. It is reckoned that only 15% of the world’s reserves of copper ore have been mined over the past 2,000 years; there are many known deposits that have not been exploited and others
are being discovered each year. However, and perversely, the mining and production of copper is a high energy and dirty process, factors which are discouraging nations from permitting or developing these reserves. Demand for copper is rising fast. An electric
vehicle contains five times as much copper as a fossil fuel one. The growth of renewable energy, i.e., electricity generation via solar panels and wind
farms, requires all of those widely distributed generators to be connected to the grid with enormous additional requirements for copper. Added to the pressure from this increasing demand, as the world is recovering economically from the Covid-19 pandemic the previous stocks of mined copper around the world are being depleted by recovering manufacturing output of all kinds, and it is this factor which is driving up the prices and lead times for copper at present times. What can we expect for the future? Aerco believes that prices and lead times will continue to grow throughout 2022. It has substantially increased its stock orders on suppliers in response to this view, seeking to put it in a position where it can continue to deliver from stock for its customers. In the longer term, the company believes that the copper producers will be able to find ways to open new capacity in response to the demand that will only continue to grow over the coming decade. Both prices and lead times will settle down again, but not in the next 12 months, Aerco believes.
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