While U.S. automakers are using more copper wiring in their vehicles, the growing number of applications doesn't necessarily signal a boon for domestic wire drawers and fabricators.
Two key factors account for this an ongoing push toward wires with smaller gauge and wall sizes, and a looming threat of material substitution. Copper wire producers' business also fluctuates with the inclination of customers—especially insulation producers—to integrate and produce their own wire.
There is no question that consumers are demanding more and more electronic gadgets and advanced creature comforts in their vehicles, including such things as power and heated seats, power windows and "infotainment" devices such as navigation systems and video players, an executive at a major copper wire fabricator said. "All of this drives demand for copper wiring," the executive added.
Whether this demand will benefit copper wire fabricators and drawers is contingent on a number of variables, including whether insulation companies, which have become increasingly vertically integrated over the years, will opt to fabricate the wire themselves or farm that business out to wire drawers, he said.
"There has been a long-time trend of more insulator companies fabricating copper into wire, assembling the wire with their insulation and selling the finished product to harness manufacturers," the fabricator executive said. "But more recently, with the economic downturn, some insulators are going back to using outside wire fabricators like us, rather than doing it themselves."
Another factor that threatens to limit copper consumption is a big push on the part of automakers for smaller-gauge wire with smaller wall thicknesses. "This trend has been occurring for at least the past three or four years and I don't see it stopping," the fabricator executive conceded.
The automakers are pushing for smaller-gauge wire not only to increase the fuel efficiency of their vehicles but also to reduce the size of the wiring harness to make room for more gadgets, a source at a large copper wire drawer said.
The price volatility of copper is another driving factor. "Over time, automakers will try to reduce the amount of copper they use as much as possible," the wire drawer source said.
"Wire gauges just keep getting smaller and smaller," the wire fabricator executive said. "Just a few years ago, 18 gauge was a lot more popular. Previously we were seeing a lot of 12 to 14 gauge. Now certain types of wire are even going to 26 gauge, although that accounts for a very small part of the market."
The 26-gauge wiring uses less copper not only because of the size, but also because it is made with copper alloys rather than pure copper in order to meet testing requirements, the wire drawer source pointed out. "The technology for us to use pure copper at such small sizes isn't there yet."
Wire wall sizes also are shrinking, with a push toward lighter crosslinked polyethylene insulation, including GXL, an intermediate insulation wire, and TXL, the thinnest, lightest and lowest cost of such wires. There's also SXL, the second-thickest of the crosslinked polyethylene insulation wires and thus more costly, which is used where more protection is needed from potential mechanical damage.
"Twenty years ago wires had SXL walls. Now they have gone to GXL and TXL walls and there is talk of going to ultra-thin walls," the wire drawer source said. "They have gone from walls as thin as 16 mils to 10 to 12 mils, and some customers are already asking for 8-mil-thick walls," the source added. "The problem is, we still need to maintain the same performance attributes. That takes a good amount of engineering (and the use of different compounds) to accomplish."
The ultimate question is, how low can it go. "There is a limit. Copper is copper," the wire fabricator executive said.
The wire drawer source is convinced the industry will continue to be asked to test that limit. "We will be asked to take it as far as the technology allows and to force technology as needed," she said, although doing so could hurt the bottom line for wire drawers. "From a production point of view, you don't want to make such small-gauged wire. You can just go so small and still remain profitable."
Meanwhile, the threat of material substitution looms. "There has been some talk of substitution by aluminum or copper-clad aluminum, but I haven't seen much come of it yet," the wire fabricator executive said.
To date, about the only area where some substitution has taken place is the battery cable, which weighed more compared with other wiring to begin with, the wire drawer source said, adding that with copper prices climbing as much as they have lately, material substitution is more of a front-burner issue than it had been in the past. "But while aluminum is lighter weight, the overall size of the wire would need to be bigger in order to get the same conductivity as pure copper. But even with the larger size, it would be lighter and generally less expensive," she allowed.
That wouldn't have been the case years ago, when copper was selling for about 85 cents per pound, the wire fabricator executive said, but it is a different story with the metal now trading at $3 to $3.50 per pound.
Even so, copper claims a number of features offsetting its cost disadvantcage
In addition to conductivity, copper is "more malleable" and therefore easier to work with.
Aluminum is a very different metal to work with, the wire drawer source said. "A lot of people know how to work with copper and are more comfortable with it."
"I think the future is positive for copper wiring," the wire fabricator executive said. "I am skeptical that it could be replaced with other materials. It will remain the main part of the electrical harness."