Skyrocketing copper price is a win-win for US and China
Surging copper prices are seen by many in China as an American financial war.
Higher prices mean heavy losses for Chinese manufacturing. It slows down China’s hi-tech sectors – electric vehicles, renewables and artificial intelligence.
Some even call copper the new oil.
The US is winning. Tariffs and market moves have worked together, pulling 400,000 tonnes of copper into the US, spreading fear and pushing prices up.
China produces more than 20 million tonnes a year but can’t stop it. A small move with big effect.
But in the long run, China may gain.
Chinese scientists have developed “super copper” with graphene. It conducts electricity better than anything else at room temperature and cuts copper use in high-end devices.
Crazy copper prices create a perfect chance for this new tech, which has just left the lab and finished pilot production.
At the same time, Chinese auto engineers and scientists are working hard to replace copper wire with aluminium.
Aluminium resists current a bit more, but it’s light. An aluminium high‑voltage cable is thicker than copper, but under extreme load – such as going from zero to 60 in under three seconds – it weighs half as much.
I’m told the downsides – more space, corrosion, stiffness – now have solid engineering fixes.
They’re just waiting for high copper prices to push the change.
China’s giant ultra‑high‑voltage grid uses only aluminium. Electric cars run at up to 800 volts. The aluminium grid handles over 1,000 kilovolts.
Aluminium costs one‑third as much as copper. Chinese products could get even cheaper. That would hurt Western competitors more.
Besides aluminium, there’s fibre optics. Chinese auto engineers are replacing copper signal cables with fibre in smart cars. It cuts cost and weight and boosts data speed.
The trade war pushed Chinese tech forward. The financial war will do the same.
We will take a break for the Christmas holidays next week, but will return in January.
Cheers,
Stephen
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