Why Copper?


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Why Copper presentation by Fushi Copperweld.

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  • NOTES: SLIDE 1 — INTRO It’s very good to be here in Gothenburg with such a distinguished group of leaders in our industry, and thanks to CRU for inviting me to speak. My company, Fushi Copperweld is a great example of the new model for business in the 21 st century— a global operation combining both Eastern and Western leadership, methodologies and corporate philosophies. The world marketplace for wire and cable is changing Emerging markets vs. existing markets Competitiveness means exploring different technologies and really thinking with a different hat on Many of our presentations yesterday revolved around this industry’s dependence on copper SEGWAY TO NEXT SLIDE: If you manufacture any kind of conductive cable today… you are a slave to one crazy master
  • NOTES: SLIDE 10 — COPPER IS NOT THE ONLY WAY TO GO START WITH “BAKER” ANALOGY, BUT KEEP IT SHORT You know, most cable designers are about copper wire the way pastry chefs are about white wheat flour— they can’t imagine working without it! There are, of course, alternatives to white flour that make very tasty desserts— cornmeal, nutmeals, spelt, rice, soy, etc.— and have added nutritional benefts and other good properties The same is true of conductors— copper is the default, but there are times when other materials provide better benefits NOW GO THROUGH THE BULLETS ON THE SLIDE... “CAPACITY OVERKILL” IS AN IMPORTANT CONCEPT (NEXT SLIDE)
  • NOTES: SLIDE 4 — WHAT ARE BIMETALLIC CONDUCTORS? Exactly what it sounds like— two metals joined into one Core of aluminum or steel, concentric copper cladding Illustrated process can vary from manufacturer to manufacturer, but this is the cladding process in broad strokes WALK THEM THROUGH THE DIAGRAM, BUT BRIEFLY One of the most important properties of bimetallics is that the two materials are permanently bonded and cannot be separated— they function effectively as one conductor Bimetallics are available in a variety of form-factors: round or flat wire in any diameter, strand, bunched fine wire, braid wire, tape, strip or busbar (NEXT SLIDE)
  • NOTES: SLIDE 2 — SLAVES TO A CRAZY MASTER I am talking, of course, about copper’s incredible volatility in the commodities market. This graph is plotted for copper prices in dollars per ton, day by day, showing massive upheaval— and this is just since 2006 If we take a bigger sample, the swings are even more telling, and if we adjust for inflation, it’s even worse Why so volatile? Speculation… Speculation has actually forced larger shifts in pricing than normally you would see from real supply and demand SEGWAY TO NEXT SLIDE I know, because we purchase copper cathode ourselves… but we are very shrewd in making the most of our copper resources
  • NOTES: SLIDE 3 — BIMETALLICS CAN SET YOU FREE Bimetallics pricing is much more stable in comparison Because we use so little copper in manufacturing bimetallic wire, and because the core metals are cheaper, bimetallics can cost as much as 70% less than solid copper wire Today, I am here to spread a message about our products, bimetallic wire & cable Honestly, bimetallics are largely misunderstood in this industry, though they have been around a very long time Even when cable manufacturers are familiar with bimetallics, conversion to them isn’t a high priority “ We just build the cables our customers ask for” I’m going to challenge you all to take a good look at bimetallics as a very real way to increase your bottom line, improve margins, and frankly, build superior products (NEXT SLIDE)
  • NOTES: SLIDE 11 — SOLID COPPER IS BOTH EXPENSIVE AND COSTLY JUST GO THROUGH BULLETS ON SLIDE, EMPHASIZE THEFT COSTS SEGWAY TO NEXT SLIDE Copper is in high demand both legally and illegally The main reason copper continues to be dominant is that bimetallics need a little better PR… there are a lot of misconceptions that need to be cleared up
  • NOTES: SLIDE 5 — CLADDING VS. PLATING Many people use “cladding” and “plating” interchangeably— in fact, in some languages there is no word to distinguish between the two processes They are very different processes, although both produce “bimetallic” wires Cladding is far superior (WALK THEM THROUGH POINTS ON SLIDE— LEAN ON BAD ECOLOGICAL ASPECT OF PLATING IN THE LAST POINT OF THAT SECTION) • So, for our purposes, we’ll only be addressing clad conductors
  • NOTES: SLIDE 6 — BIMETALLIC ADVANTAGES JUST WALK THEM THROUGH THE BULLET POINTS ON THE SLIDE, GIVE SPECIAL ATTENTION TO SKIN EFFECT Skin effect is really what makes bimetallics so well-suited to high frequency applications WHEN YOU GET TO “THEFT DETERRENT”… DON’T GO TOO FAR INTO IT I’ll talk a bit later about the importance of theft deterrence in our industry, but it is one of the chief advantages of bimetallics Now I’d like to explain the two main types of bimetallic conductors
  • NOTES: SLIDE 7 — CCS JUST GO THROUGH THE BULLETS ON THE SLIDE… THE ILLUSTRATION IS YOUR SEGWAY TO THE NEXT SLIDE CCS is ideal for any application that requires high fatigue resistance or tensile strength
  • NOTES: SLIDE 8 — CCA AGAIN, JUST GO THROUGH THE BULLETS ON THE SLIDE… LEAN ON FINE WIRE CAPABILITIES As electronics get smaller and weight becomes an issue, CCA is a particularly good alternative because of its light weight
  • NOTES: SLIDE 13 — CHANGING ATTITUDES THIS IS WHERE WE SPEAK DIRECTLY TO THEM AND MAKE OURSELVES LOOK LIKE THE R&D LEADERS JUST GO THROUGH THE BULLETS ON THE SLIDE, UNDERLINING OUR COMMITMENT TO ASSISTING THEM IN THEIR R&D EFFORTS SEGWAY TO NEXT SLIDE: It is always in the best interest of our customers to come up with better solutions — and what is in our customers’ best interest, is in our best interest What follows is a little illustration of how we as a company listened to the needs of our market, and have been able to help craft a new product (NEXT SLIDE)
  • NOTES: SLIDE 9 — ADVANTAGEOUS APPLICATIONS These are some of the markets where bimetallic conversion has been successful and could be more widespread AGAIN, JUST GO THROUGH THE BULLETS ON THE SLIDE… USE THE ILLUSTRATION WHEN SPEAKING TO AUTOMOTIVE SEGWAY TO NEXT SLIDE: What keeps bimetallics from being the worldwide standard in these applications is a failure on the part of our own industry to recognize bimetallics as their own proper entity Copper is so completely dominant… but… (NEXT SLIDE)
  • NOTES: SLIDE 16— NEW VISTAS FOR BIMETALLICS JUST WALK THEM THROUGH… WHEN YOU GET TO BUILDING WIRE, WE HAVE A CASE TO MAKE: Here’s an example of how bimetallics can be used to reduce costs, and as such, boost margins for a low-margin application, building wire… we’ve heard at this conference that a lot of cable manufacturers want to get out of this market… that’s because copper is killing you In the West, there is a misconception that you can’t use CCA as building wire That’s because they’re thinking of it like aluminum Pure aluminum was used as a cheaper alternative to copper wiring back in the 1960s and 1970s Failure to understand the physical properties and install proper connectors led to fires This is NOT a problem with CCA… it uses copper connectors— copper-to-copper Safety is naturally the primary concern— emerging markets are the proving ground for CCA in building wire all over the world It is being used without incident as a safe, reliable and cost-effective building wire
  • NOTES: SLIDE 18— FUSHI COPPERWELD WHO WE ARE— AGAIN, NOT A HARD SELL… DON’T WALK THEM THROUGH THESE BULLETS, JUST LEAVE THEM UP ON THE SCREEN As the world leader in the bimetallics industry, we feel a duty to speak on behalf of all bimetallics suppliers We want our cable manufacturing partners to understand that bimetallics offer them an array of choices and possibilities that will make their products better Your success is our success I HONESTLY DON’T EXPECT TONS OF QUESTIONS, BUT BE READY… IF IT GETS CONTROVERSIAL IT WILL BE ABOUT: GALVANIC CORROSION: Tinning or other processes can eliminate corrosion WE JUST TAKE ORDERS, WHY SHOULD WE CARE?: If cable manufacturers suggest bimetallics, their savings can yield better margins CHINA AND QUALITY: First, make sure of the process: plated is not clad I can’t speak for all manufacturers, but I can speak for us— we are as committed to shipping quality products from China All our facilities are ISO certified for quality IMPORTANT QUESTION:
  • Why Copper?

    1. 1. Thomas Horton, Global Marketing Director Fushi Copperweld, Inc. (Nasdaq:FSIN) Web Site Presentation www.fushicopperweld.com 26 July 2010
    2. 2. <ul><li>Copper is merely the default </li></ul><ul><ul><li>Silver is the best conductor but too expensive </li></ul></ul><ul><ul><li>The same is true of copper vs. bimetallics </li></ul></ul><ul><ul><li>IACS measures all conductors against copper of the same diameter </li></ul></ul><ul><ul><li>Upsizing in bimetallics can bring about the same conductivity and still save weight </li></ul></ul><ul><li>Ideal conductivity ≠ sufficient conductivity </li></ul><ul><ul><li>In order to make copper wire strong enough for a specific task , it is often upsized, producing “capacity overkill” </li></ul></ul><ul><ul><li>Norms and requirements for each application should be evaluated and re-thought </li></ul></ul><ul><ul><li>More copper = more cost </li></ul></ul>Telling some cable engineers to design without pure copper wire is like telling a baker to make a dessert without wheat flour— they just don’t think about the alternatives and their benefits!
    3. 3. <ul><li>Core of steel (CCS) or aluminum (CCA), clad in copper </li></ul><ul><li>Thin layer of copper metallurgically bonded using heat and pressure </li></ul><ul><li>Two materials are permanently united and cannot be separated </li></ul><ul><li>Supplied as round and flat wire, strand or bunched fine-wire, tape, strip or busbar </li></ul>Copper Steel Cooling Take-up Copper Core Bimetallic Wire
    4. 4. <ul><li>Copper price volatility makes budgeting difficult </li></ul><ul><ul><li>Incredible fluctuations compared to real supply and demand </li></ul></ul><ul><ul><li>Heavy speculation in copper futures drive an already unstable commodity to dizzying ups-and-downs </li></ul></ul>
    5. 5. <ul><li>Pricing of bimetallics is far more stable </li></ul><ul><ul><li>Core metals (steel and aluminum) are both cheap in comparison to copper </li></ul></ul><ul><ul><li>The amount of expensive copper used in bimetallics manufacture is just 3% to 7% of wire diameter </li></ul></ul>
    6. 6. <ul><li>Performance </li></ul><ul><ul><li>Ductility = soft, low tensile strength = breakage </li></ul></ul><ul><ul><li>ETP copper wire is not oxygen-free, and may oxidize faster— bimetallics are usually made with oxygen-free copper </li></ul></ul><ul><li>Lucrative black market makes pure copper a target for theft </li></ul><ul><ul><li>Costly replacement of lost materials </li></ul></ul><ul><ul><li>Costly interruptions of service </li></ul></ul><ul><ul><li>Costly extra security </li></ul></ul><ul><ul><li>Loss of personnel, hazards, dangers </li></ul></ul><ul><li>Bimetallics are theft resistant </li></ul><ul><ul><li>CCS is incredibly strong and hard to cut </li></ul></ul><ul><ul><li>Copper cannot be separated from core metal </li></ul></ul><ul><ul><li>No recycling or conversion </li></ul></ul><ul><ul><li>Low scrap value </li></ul></ul>Theft resistance is an incredible boon in the utility, transport and telecom cable industries, where installations are often remote and poorly guarded
    7. 7. <ul><li>Both are bimetallic processes, but very different techniques </li></ul><ul><li>Plating is an electrochemical process </li></ul><ul><ul><li>Copper being applied is molten </li></ul></ul><ul><ul><li>Thickness of coating can vary greatly; voids and porosity can be a problem </li></ul></ul><ul><ul><li>Subject to cracking or peeling </li></ul></ul><ul><ul><li>Process is highly toxic, involves alkalis, acids and harmful chemicals like cyanide which are environmentally challenging </li></ul></ul><ul><li>Cladding is a mechanical process </li></ul><ul><ul><li>Copper being applied is solid </li></ul></ul><ul><ul><li>Won’t crack, flake or peel </li></ul></ul><ul><ul><li>Copper cladding is uniform— copper to core ratio remains the same, even after drawing to very fine gauges </li></ul></ul><ul><ul><li>Metallurgical bond is permanent— metals cannot be separated </li></ul></ul><ul><ul><li>Environmentally friendly </li></ul></ul>Cladding and plating may look the same, but for the purposes of this discussion, we will be concentrating solely on copper- CLAD steel (CCS) and aluminum (CCA).
    8. 8. <ul><li>Conductivity and connectivity of copper, added qualities of core metal </li></ul><ul><ul><li>No conversion of connectors, clamps or installation tools </li></ul></ul><ul><ul><li>Strength, fatigue resistance properties of steel </li></ul></ul><ul><ul><li>Light weight, anti-oxidation and flexibility of aluminum </li></ul></ul><ul><li>Skin effect </li></ul><ul><ul><li>High-frequency AC current density is greater near the outside surface of the wire than at its center </li></ul></ul><ul><ul><li>Copper surface allows for excellent conductivity </li></ul></ul><ul><li>Cheaper than solid copper conductors </li></ul><ul><ul><li>More stable pricing as well </li></ul></ul><ul><li>Permanent metallurgical bond </li></ul><ul><ul><li>Little or no scrap value </li></ul></ul><ul><ul><li>Theft-deterrent </li></ul></ul>Varying density of electric current (represented in grey )throughout the same wire cross-section shows the skin effect, which makes bimetallics ideal for high-frequency AC applications DC Low-frequency AC High-frequency AC
    9. 9. <ul><li>Tried and tested in the marketplace, invented in 1915 </li></ul><ul><li>Available in standard conductivities </li></ul><ul><ul><li>21%, 30%, 40%, 53% and 70% IACS, depending on copper content </li></ul></ul><ul><li>Available in various grades of steel </li></ul><ul><li>Delivered in annealed or hard-drawn state </li></ul><ul><li>Strands well, even at large gauges </li></ul><ul><li>Very durable and resistant to fatigue </li></ul><ul><ul><li>Hard-drawn CCS vs. Cu yields cables with the conductivity of Cu 4 gauges smaller but the strength of Cu 6 gauges larger </li></ul></ul>Because of its high tensile strength, CCS is a very good choice for overhead wire used in railway and other power/signal distribution and grounding lines. <ul><li>Utility </li></ul><ul><ul><li>Grounding, transmission, distribution </li></ul></ul><ul><li>Railway </li></ul><ul><li>Telecom </li></ul><ul><ul><li>Telephone drop wire </li></ul></ul><ul><ul><li>CATV drop wire & coaxial cable </li></ul></ul>
    10. 10. <ul><li>Available in standardized copper-to-aluminum ratios by volume </li></ul><ul><ul><li>10% and 15% copper round wire and 20% copper flat wire </li></ul></ul><ul><ul><li>Conductivity of 63% - 67% IACS </li></ul></ul><ul><li>Ability to draw to gauges as fine as 0.06 millimeters </li></ul><ul><li>Light weight and flexible, excellent for bunched wire </li></ul><ul><ul><li>2.7 times the length of copper at equivalent weight </li></ul></ul><ul><ul><li>One-third the weight of copper at equivalent length </li></ul></ul><ul><li>Does not require special aluminum connectors </li></ul><ul><ul><li>Can be safely interchanged with pure copper wire </li></ul></ul>CCA is an excellent choice for high-frequency applications, such as CATV coaxial cables. <ul><li>Telecom </li></ul><ul><ul><li>CATV coaxial cable </li></ul></ul><ul><ul><li>Enameled magnet wire </li></ul></ul><ul><li>Electronics </li></ul>
    11. 11. <ul><li>Electrical engineers need to learn about the advantages bimetallics can bring to their products </li></ul><ul><ul><li>Cheaper </li></ul></ul><ul><ul><li>Stronger </li></ul></ul><ul><ul><li>More flexible </li></ul></ul><ul><ul><li>Lighter </li></ul></ul><ul><ul><li>More secure </li></ul></ul><ul><li>The bimetallics industry worldwide must make an effort to educate and inform </li></ul><ul><li>Bimetallics manufacturers should dedicate R&D resources to assisting cable manufacturers with bimetallic conversion </li></ul><ul><ul><li>Testing & quality assurance </li></ul></ul><ul><ul><li>Certification </li></ul></ul><ul><ul><li>Academic research </li></ul></ul>The process of cladding may be 95 years old, but new applications are always challenging bimetallics manufacturers to provide better solutions through top-flight R&D
    12. 12. <ul><li>Consumer electronics and white goods </li></ul><ul><ul><li>Power cables </li></ul></ul><ul><ul><li>Internal fine wiring </li></ul></ul><ul><li>Automotive/heavy machinery/avionics </li></ul><ul><ul><li>Battery cables </li></ul></ul><ul><ul><li>Signal wires </li></ul></ul><ul><ul><li>Control cables </li></ul></ul><ul><ul><li>Braided cable and straps </li></ul></ul><ul><li>Building wire </li></ul><ul><li>Tracer wire for buried non-metallics </li></ul><ul><ul><li>PVC pipe </li></ul></ul><ul><ul><li>Strength members for fiber optic cable </li></ul></ul><ul><li>Detonation wire </li></ul><ul><li>Wind farms </li></ul><ul><ul><li>Grounding </li></ul></ul><ul><ul><li>Servo control </li></ul></ul><ul><ul><li>Magnet coil wire </li></ul></ul>Automotive applications could vastly benefit from bimetallic conversion— there are over 1,500 individual wires in the average automobile, weighing about 20 kg.
    13. 13. <ul><li>Renewable energy </li></ul><ul><ul><li>Wind </li></ul></ul><ul><ul><li>Solar </li></ul></ul><ul><ul><li>Undersea umbilical </li></ul></ul><ul><li>Consumer electronics & white goods </li></ul><ul><li>Automotive cables </li></ul><ul><ul><li>Battery </li></ul></ul><ul><ul><li>Signal </li></ul></ul><ul><ul><li>Control </li></ul></ul><ul><li>Telecom </li></ul><ul><ul><li>Data/LAN cables </li></ul></ul><ul><li>Building wire </li></ul><ul><ul><li>Overcoming misconceptions </li></ul></ul><ul><ul><li>Safety first </li></ul></ul><ul><ul><li>Proven performance </li></ul></ul><ul><ul><ul><li>CCA building wire is gaining market share in many world markets, and proving safe, reliable and cost-effective </li></ul></ul></ul>The physical properties of pure aluminum make it unsafe as building wire without conversion to special connections— CCA eliminates the need for such a changeover by working well within the existing framework for copper wire
    14. 14. <ul><li>Cable design engineers need to become more familiar with the advantages and challenges of bimetallic components and the additional options they provide </li></ul><ul><li>Standardization and certification by international standards agencies must be pursued with an endorsement from cable manufacturers </li></ul><ul><li>The bimetallics industry must partner with cable manufacturers on R&D initiatives to make better cables at lower costs for a wider variety of applications </li></ul><ul><ul><ul><ul><li>Thinking “outside the copper box” </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Working side by side to optimize cables for increasingly stringent requirements </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Making full use of bimetallic conductor properties to offer better products </li></ul></ul></ul></ul><ul><li>Customers win = cable manufacturers win = bimetallics suppliers win </li></ul>
    15. 15. <ul><li>The inventor of bimetallic cladding, operational since 1915 </li></ul><ul><li>The world’s leading producer of copper-clad aluminum and steel conductors </li></ul><ul><li>Five manufacturing locations on three continents </li></ul><ul><li>Publicly traded on the Nasdaq (FSIN), poised for growth </li></ul><ul><li>Shared Chinese and American corporate leadership </li></ul><ul><li>Dedicated to working on new solutions to widen bimetallic adoption worldwide </li></ul>