Consider your options to prevent burgeoning copper prices eating into profits

Considering that copper prices have already rallied from just above $2,800 per tonne in December 2008 to a record high of $10,190 a tonne in February of this year, this latest predicted increase looks set to have far reaching implications throughout industry as copper is used extensively in many different sectors, from power generation and distribution, to automotive and marine. This problem looks only to be compounded by the fact that copper inventories are falling to their lowest levels on record, with a recent survey expecting the market to remain in a deficit at least through to the end of the year.

The strength of global refined copper consumption looks set to remain strong in 2011 and although mining production is seen as picking up and the volume of materials recycled from scrap is rising further, the increase in supply is not expected to meet the demand. As a result, the many companies throughout industry who rely on the red metal are left to tackle the quandary of what to do in order to remain productive, competitive and profitable in such difficult times.

For some manufacturers the only solution seems to be in simply increasing the price of goods leaving the factory gates, if they are to protect profit margins. In practice, however, this is not always possible, especially at a time when the world is undergoing a tough period of post recession recovery, with depressed levels of local demand, or where manufacturers have to compete in increasingly challenging export markets.

There are other options that should be considered, such as efficiency savings, although with most businesses today already running extremely lean operations, there is limited potential for shaving costs still further. Perhaps the most viable options are to consider a switch to lower cost materials, so long as they can ensure that the required characteristics of the finished products can be retained, or by adopting more cost effective production methods, such as cold forming.

In particular, these latter options can deliver significant benefits to those industries using high volumes of copper to produce precision parts and components, especially those using a large quantity of mill supplied Tellurium Copper (CuTE) rods or bars. Although this metal machines well, the processes that have traditionally been used to create the finished parts and components, such as milling, drilling and grinding, usually generate a substantial volume of waste material that ultimately adds to costs.

For example, machining a typical Tellurium copper nozzle for use in plasma or laser welding applications, with a finished weight of 36g, requires a block of metal weighing 213g from which the shape can be milled. Accordingly, this generates 177g of waste material, over 80% of the total starting weight. At today’s copper prices, this equates to well over £1.00 of wasted material per component, which simply does not make sound business sense; even less so when you consider that this metal is becoming increasingly difficult to source, as a declining number of companies choose to produce it due to the health and safety risks associated with its manufacture, and is usually priced at a premium.

By comparison, precision cold forming is proven, produces minimal waste and typically uses oxygen free copper wire, which is often far more commercially viable than machining Tellurium copper. Indeed, oxygen free copper is readily available, so prices are extremely competitive, and are generally far lower than those of Tellurium copper; as importantly, precision cold forming oxygen free copper produces significantly better results than machining in many applications thanks to its superior electrical and thermal properties.

Particularly when it comes to the production of high volume parts, such as bevel, side and pinion gears and steering racks, or smaller volumes of larger components such as flanges and impellors, cold forming certainly represents the most cost effective production method. This innovative technique can produce extremely high quality components, which have superior mechanical characteristics and a better surface finish with considerably less scrap, typically up to 80% less than conventional part manufacturing processes.

Indeed, component costs can be reduced by up to 70% in many instances, while lead times can be cut by a similar amount. For instance, to use the earlier example of a copper laser nozzle, only a 54g billet would be needed to produce a fully shaped part that simply requires a minimal amount of final machining, resulting in waste of just 18g or less than 10p in terms of cost.

Although cold forming is an established process it has yet to be widely understood by some engineers, who often automatically turn to traditional component manufacturing methods when parts are needed. However, it is worth taking a closer look at cold forming as a favourable alternative to conventional production methods and should not be overlooked if you are to counter the associated costs of the soaring copper prices.

Essentially, cold forming is the process of producing metal components at low, usually ambient temperatures without removing any material. A simple blank, which has been sawn or cropped from a round bar or wire, or a cold headed pre-form is placed within a die and a punch is applied to the blank. As a result of the force, the blank then takes on the form of the punch and the die.

There are a number of types of cold forming, ranging from forward and backward extrusion through to freeflow. The type of component required should be used to determine the method of cold forming that is most suitable for the application. Through extrusion, drawing or coining, a blank can be made into a wide range of components, segments and assemblies.

Cold forming offers many advantages in the manufacture of metal components over and above the cost savings mentioned earlier. As it is performed at ambient temperatures, cold forming is a far quicker process than more conventional options, allowing manufacturers to achieve much shorter production times. This in turn means that components can be made to order extremely quickly, cutting lead times and the need to store high volumes of spare parts onsite. Production cycle times can be cut still further on multi-station machinery, which can be particularly useful in large production runs.

Cold forming also makes for a superior quality finished product. For example, the grain structure of the material being extruded is forced to follow the contours of the component, unlike in forging and machinery where the part is cut away at. As a result, the strength of the part is maximised along its length, very much in the same way that a piece of wood is stronger with the grain.

Additionally, parts undergo work hardening during the cold forming process, improving their machinability and durability still further. Work hardening dislocates the structure of the metal in a way that prevents further dislocations, resulting in a stronger component. As this increase in strength is comparable to that of heat treating, it can be more cost effective to cold work a less costly and weaker metal than to hot work a more expensive metal, particularly where a precision finish is required.

The cold forming process also makes it possible to produce component parts with a superior finish, both internally and on the surface. Accurate internal profiles and complex external profiles are possible, enabling precision parts to be manufactured that can have a significant impact on the performance of the assemblies and machinery in which they are used.

There is almost no limit to the shape, size or complexity of the metal components that can be produced using cold forming. Simple cold headed parts or highly complex cold formed and finished machined components can be produced for a diverse range of applications, ranging from aerospace and automotive, through to power di