Rising Copper-Wire Costs Have Exceeded Lumber
In October 2021 copper wire’s YoY cost growth was 156%.
Exploding, volatile lumber prices grabbing many of the headlines over the past year. Now look out for soaring copper wire costs, which have risen at a greater rate than lumber did, according to an analysis by Corelogic.
In June 2021, costs for lumber, an important component of construction, increased by 129% YoY in the US, contributing mightily to an increase in overall reconstruction cost.
Cost growth for copper wire has significantly increased as well, with October 2021 YoY cost growth in the US at 156%. This spike is due to strong expectation of demand and supply constraints in conjunction with the continuing recovery of the US economy and the new infrastructure bill.
Copper’s Role in a Low-Carbon Economy
Construction data firm Gordian writes that another demand driver will keep copper costs high in the coming decades: its critical role in sustaining a low-carbon economy. Copper has the greatest thermal and electrical conductivity of any non-precious metal and is widely used in solar power systems, wind-powered industrial processes, energy storage technologies and electric vehicle production and infrastructure, it notes.
“By using copper in energy applications, energy efficiency and reliability are improved and greenhouse gas emissions are reduced.”
One bit of good news, at least for residential home developers, including BFR: copper wire is a significantly lower portion of the overall building cost of a home than lumber. Recent CoreLogic RCT data indicates that, since last quarter, reconstruction cost has actually declined in many US states with a national average drop of 0.3%.
On the negative side: While copper pipes have viable alternatives, copper wire does not.