Global Copper Shortage: What Does It Mean for Manufacturers?
- Grupo Edmar
- Aug 27
- 3 min read
August 27, 2025 - Global Copper Shortage.
Why is Copper so Important in Industry?
Copper isn't just any material; it's the backbone of modern electricity . Thanks to its excellent electrical and thermal conductivity, it's the preferred metal for the manufacture of cables, motors, transformers, and distribution systems. It also has high corrosion resistance, making it durable in demanding industrial environments.
In the case of electrical transformers , copper is essential for the windings and for the equipment's energy efficiency. A transformer with quality copper can have a longer lifespan and lower electrical losses. Therefore, whenever there is a problem in the copper supply chain, the entire electrical industry feels the impact.
Factors behind the Copper Shortage.
The copper shortage is explained by a combination of factors:
Increasing global demand : Countries like China and India require large amounts of it for infrastructure, housing, and energy projects.
Energy transition : The growth of renewable energy and electric mobility is driving up the demand for copper.
Decline in new mines : Opening a mine can take more than 10 years between permitting and operation.
Social and political problems : Strikes in Chilean mines, blockades in Peru, and global trade tensions have reduced production.
Environmental impact and regulations : Today, mining projects face more environmental controls, which delay their operation.
In short, supply has not been able to grow at the same rate as demand.
Direct Impact on Manufacturers.
For manufacturers, the copper shortage not only means paying more for raw materials, but also more careful inventory planning . Every ton of copper price increase impacts the final cost of electrical products.
Real-life example: During 2021-2022, the price of copper reached historic highs of over $10,000 per ton. This forced transformer and cable manufacturers to constantly adjust prices and, in some cases, delay projects.
Furthermore, uncertainty arises in long-term contracts: if a company quotes a transformer in January, but the copper price rises 20% in March, the project's profitability is jeopardized.
The relationship between the Energy Transition and Copper.
The global energy transition is one of the main drivers of this shortage. Copper is essential for electrification because:
An electric car requires between 60 and 80 kg of copper , twice as much as a conventional vehicle.
A wind turbine can require up to 4 tons of copper in its coils and cables.
Clean energy transmission systems rely on copper lines to minimize losses.
This creates a paradox: the further we move toward a sustainable future, the more we put pressure on the consumption of a limited resource.
Strategies that Manufacturers are adopting.
Manufacturers have not sat idly by and have begun to implement different strategies:
Use of aluminum as a partial substitute : although it does not have the same conductivity, it is cheaper and lighter.
Design efficiency : Equipment that achieves the same performance with less copper, thanks to optimized engineering.
Copper recycling : recovering material from old transformers, wiring, and motors to reincorporate it into the production chain.
Supplier diversification : not depending on just one producing country.
Long-term contracts : ensuring more stable prices to avoid market volatility.
Grupo Edmar, for example, has worked to optimize manufacturing processes and guarantee its customers the availability of electrical equipment, even in shortages.
What does this mean for electrical customers and projects?
Customers must be prepared for three realities:
Price increases : Infrastructure projects can become more expensive by up to 10-15% due to the cost of copper alone.
Longer lead times : Some manufacturers face production delays due to material shortages.
Greater need for planning : It's no longer enough to order a transformer or a batch of cables overnight; it's now important to plan ahead.
A concrete example: a company looking to install an electrical substation may have to readjust its initial budget if the price of copper skyrockets between design and execution.
Mexico's role in copper production and consumption.
Mexico occupies a significant position in global copper production, primarily with mines in Sonora and Zacatecas. However, much of this production is earmarked for export, limiting the direct benefits for local manufacturers.
For the Mexican electricity industry, this represents an opportunity to attract investment and, at the same time, a challenge, as international competition for copper is increasingly fierce.
Looking to the Future, What to Expect?
Analysts agree that copper demand will continue to grow over the next 20 to 30 years, driven by the electrification and digitalization of economies. The key will be:
Promote responsible mining .
Increase copper recycling.
Innovate in substitute materials .
Establish strategic alliances between manufacturers and customers.
In this context, working with reliable companies like Grupo Edmar guarantees not only the quality of the equipment, but also the support of a supplier that understands global challenges and offers real solutions at the local level.
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