If you have read anything about copper in the last few years, you have probably seen it called "the metal of electrification". It is a tidy phrase, and it is doing a lot of work. The more useful question is the concrete one: when an electricity system gets built, where does the copper physically go, and where does it not?
This article sticks to the engineering, including the parts of the grid where copper is not the metal of choice. It is not financial advice, and it contains no forecast about any metal price.
Why copper became the default electrical metal
Copper is an excellent electrical conductor. Silver conducts better, but it costs far more, which rules it out for running through a house, a switchboard or a substation. Copper sits at the point where good conductivity meets a workable price and a workable supply, which is why it became the standard. The international scale engineers use to describe conductivity is defined against annealed copper, which gives you some idea of how central the metal has been to the discipline.
Conductivity is only half the reason
Plenty of materials carry current. Copper won on the unglamorous properties as well.
- It draws into wire. Copper is ductile enough to be pulled down to very fine strands without becoming brittle, then bundled back up into flexible cable.
- It joins well. Copper solders, crimps and bolts reliably, which matters in a system that is mostly made of connections rather than of continuous runs.
- It handles heat sensibly. Current warms a conductor. Copper conducts heat away well and has a high melting point, so it tolerates the thermal cycling that normal load patterns create.
- Its corrosion behaviour is predictable. Copper tarnishes to a thin, adherent surface layer rather than flaking away, so the metal underneath stays intact and mechanically sound.
- It recycles. Copper can be reprocessed without losing its electrical performance, and scrap recovery is widely reported as a significant part of overall copper supply.
Where the copper actually sits
Walk an electricity system from the generator to the wall socket and copper turns up in a fairly consistent set of places.
- Generation. The rotating machines in hydro, geothermal and wind plant typically use copper windings in their generators, along with copper in the connected switchgear.
- Transformers. The windings inside many transformers, from grid-scale units down to the pole-mounted and pad-mounted ones in your street, are copper.
- Distribution and service lines. Underground cable and the service connection running to a building are commonly copper, particularly at smaller sizes.
- Buildings. House and commercial wiring, switchboards, busbars and earthing systems are predominantly copper.
- Motors. Electric motors, from pumps and fans to industrial drives, are a major use of copper. Every motor is essentially a coil of copper wire doing useful work.
- Newer loads. Electric vehicles, chargers, battery installations and solar inverters all add copper wiring, and this is widely reported as a growing area of demand.
And where copper is not used
This is the part that usually gets left out. The long overhead transmission lines strung between steel towers are generally not copper. They are aluminium, often with a steel core for strength. Aluminium conducts less well than copper for a given thickness, but it is much lighter, so for the same current-carrying capacity you can hang a longer span from a cheaper structure. On a transmission line the weight of the conductor drives the cost of everything holding it up, and aluminium wins that trade-off.
Aluminium also appears in some larger distribution cables and busbars for the same reasons. And in telecommunications, copper pairs have been widely replaced by fibre, which removed a category of demand that copper used to serve.
So copper is not "the grid" in some total sense. It dominates the parts where compactness, jointing and efficiency matter more than weight, which is most of the system below the transmission towers.
The New Zealand picture
New Zealand's high-voltage transmission network is operated by Transpower, and distribution from there to homes and businesses is handled by regional lines companies, such as Orion in the Christchurch area. Generation here is heavily weighted towards renewables, mainly hydro, with geothermal and wind alongside it.
The direction of travel that gets discussed in policy and industry circles is more electrification: transport shifting from petrol and diesel to electric, and industrial process heat shifting from coal and gas to electricity. Both of those changes are physically built out of transformers, cabling, motors and switchgear, which is copper-intensive work. That is a widely reported observation about how electrification is constructed. It is not a prediction about prices, and we are not in a position to make one.
How this relates to bullion
Here is where we will be blunt, because it matters.
The copper that goes into a grid is not bullion. Industry buys cathode, rod, wire and scrap, in tonnes, to specifications written around fabrication. A one ounce round is a different object with a different market. It is a small, tangible piece of refined metal sold at retail, and its price reflects the cost of striking, packaging, freight and retailing as well as the metal inside it.
That gap is easy to see in our own pricing, which is GST inclusive. A tube of 20 one ounce rounds is NZ$160.00, which works out at NZ$8.00 per ounce. A single one ounce round is NZ$10.00 and a single one ounce bar is NZ$9.00. Same metal, same .999 purity, different per ounce figure depending on how much fabrication and handling sits behind each piece. In small formats, the making of the item is a meaningful share of what you pay.
So the honest framing is this. The industrial story explains why copper is an interesting and useful metal to know about. It does not tell you what a bullion piece will be worth later. We are not licensed financial advisers and nothing on this blog is financial advice. If you are weighing up a purchase as part of your finances, talk to someone qualified and independent.
Practical notes for buying
If you do want to hold some copper, a few plain facts about how it works with us.
- GST. New Zealand's fine metal exemption covers investment-grade gold, silver and platinum only. Copper is not covered, so our prices are GST inclusive. Confirm your own position with your accountant or with Inland Revenue.
- Purity. Our copper bullion is .999 fine, which is three nines.
- Delivery. We deliver within New Zealand only. Shipping is NZ$20.00 flat and free on orders over NZ$200.00, dispatched within 1 to 3 business days and sent tracked with signature on delivery. Full terms are in our shipping policy.
You can see the full range on the copper bullion collection. If you have a question about a specific product, weight or delivery timing, email sales@globalcopperbullion.com and we will answer it directly.
Not financial advice. Global Copper sells physical copper bullion. We do not provide investment advice, price forecasts or recommendations, and we do not operate a mint, refinery, vault or buyback service. Please make your own enquiries before purchasing.