Market Watch: How Do Rising Copper Prices Affect You?
Copper is an integral material in domestic hot water systems. From pipes, fittings, and valves, to all the internal parts of a boiler, and even electrical components and wires, copper is the single most essential metal to keep hot water flowing. As the global economy continues to recover, changes in market demands and an overburdened supply chain have substantially increased the cost of copper.
In January 2021, the market rate for copper was $3.75/lb. Now, as we enter into April, the current cost of copper is nearing all time highs at $4.074/lb. For reference, last year at this time, copper cost just $2.10/lb.
What’s driving this increase? Demand outweighing supply.
Though the supply of copper is expected to increase somewhere between 1.5% and 3.5% this year, demand is still expected to exceed available supply.
In the next 5-10 years, the deficit between demand and supply is expected to continue increasing. Because of a lack of new copper deposit discoveries and the fact that most of the major deposits in production are currently in their “golden years”, supply simply will not be able to keep up with demand, with the result being even higher copper prices.
For decision-makers weighing planned improvements, the likelihood of continued price increases makes budgeting for future maintenance expenses quite uncertain.
If your equipment is nearing the end of its life expectancy, deferring those replacement costs will likely result in higher materials costs. For those considering replacements or upgrades, it would be wise to lock-in pricing sooner rather than later.
If your equipment isn’t quite ready yet to be replaced, you’ll want to make sure you’re getting the most out of it. Taking the right steps to extend the life of your equipment is essential now more than ever.