Over the past 3 years every electrician and electrical engineer I work with has told me the same thing - that the price of wire has gone up a lot and is very unstable. I assumed this price instability to be as a result of COVID supply chain issues - however I now see that it's a result of the global copper shortage.
Electrical contractors get all their equipment from electrical wholesalers. This includes everything from fixtures, breakers, conduit, wire, relays, switches, poles, certain tools, etc. Whenever most of these items are quoted, the quote is almost always honoured for 30 days so that it has time to get approval from every party (developer, architect, engineer, general contractor, electrical contractor all need to sign off on the shop drawings, and communication takes time).
Wire has always been the one exception to this - historically wire quotes are typically honoured for 7-15 days, rather than 30 days. The reason for this is because wire has very low margin (3% is common), and copper is a floating commodity.
In 2021 and supply chains got disrupted, prices in the electrical industry got extremely unstable, and manufacturers stopped handing out 30 day quotes. For about a year we saw 15 day or even 7 day quotes for fixtures, poles, breakers, and so forth. This only applies to electrical devices, and not wire.
Wire quotes, which previously were as long as 15 days, all of a sudden dropped to 2-3 days. I assumed this to be for the same reason as the rest of the industry, which was COVID supply chain issues.
Fast forward to about a year ago, and all of the electrical supply chain issues have been sorted out, and we are back to 30 day quotes for all electrical devices at every step. Great.
However, wire quotes are still only being honoured for 2-3 days while the rest of the industry has stabilized. I found this very strange, until I learned about the copper shortage.
Digging deeper into I now see that this is because of a global copper shortage:
1. The world uses more electricity than ever before.
2. Copper is the best option we have for electrical transfer - it is incredibly conductive, but doesn't get hot like aluminum. And it has been relatively cheap, historically.
3. Global copper discoveries have gone down significantly over the past 30 years, despite discovery budgets having gone up (
source)
Unless massive new copper discoveries are made, this problem is not going to go away any time soon. In fact it's probably going to get worse since there is an ever growing demand for electricity.
Ultimately I think that copper is about to get a lot more expensive, and the electrical industry is going to evolve as a result.
We already have a solutions that require less wire to be installed:
1. Wireless communication technology has become extremely reliable, and you can now control all of your lights using wireless switches. This can save hundreds kms of wire on even a medium sized building.
2. Solar has become more affordable. A lot of outdoor lighting can now be powered using solar panels mounted directly to the pole, for example. This used to cost $20K per pole 10 years ago. Now it cost $5K per pole, and is cheaper than trenching or even directional boring, depending how far the wire needs to travel. Until now this has only really made sense for remote locations, but if the copper shortage continues, I think we'll see more widespread adoption of this. (
Example)
3. Battery storage has become much better and more affordable as well, with constant innovation. Batteries have their own challenges with components that need to be mined, but I don't know enough about this to comment. All I know is that batteries today are better and cheaper than they've ever been.
Ultimately I think we're about to see all the "legacy" uses of copper transition to newer technology that doesn't require incredibly long wire runs. We're headed into a world, in my opinion, where every building generates its own power. This was already happening, and a global copper shortage will just add fuel to the fire.
My take on this is purely related to my own experience in the electrical construction industry, which is only one use of copper. But as a whole, I think we're about to see a massive de-copperization, so that we're not as reliant on this metal anymore. Plumbing industry uses a lot of copper as well for example, but I'm not an expert in that field.
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And it's definitely not declining, at least not here. Rents are higher than ever and still climbing. Even property values were still going up as well, last I checked, even with interest rates being what they are.
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