Manufacturers of small and large generators use copper, aluminum, and iron. These are their primary raw materials.
Today, you need a backup generator for your business. You also need one for your home.
Diesel generators fit the bill very well. They have more power, they are easier to maintain, and they can last a long time.
If you are a generator supplier or vendor, you may be worried about the price of generators. You want to sell affordable products without passing too much cost to your customers.
The price of materials that manufacturers use in generators determines the cost of the finished product. Thus, you must always consider the future expenses of the primary materials. If the raw materials become too costly, the generators will become expensive and vice versa.
In the commodities markets, materials such as copper, aluminum, and iron are also traded. Thus, to know where the prices are going, check these markets. You can also check the past price trends.
The capacity and the size of the generator also determine its cost. The bigger it is more the raw materials that the manufacturer uses to make it.
Cost of generator materials
A diesel generator converts fuel (diesel, gasoline, or natural gas) into electrical energy. You can then implement this energy to power your home or business equipment.
Do that. A hefty mechanical process takes place. Like a vehicle engine, a diesel generator comes with so many components.
Some of them are steel, aluminum, copper, and others iron. Some parts are also made of plastic. These are the primary materials, as there are many others.
Some parts, such as the fan housing of most diesel generators, use cast iron. Mild steel is the primary material for the casing/canopy. Polishing and anti-corrosion treatments make the materials last long without rusting.
How manufacturers use copper and aluminum in generators
Some people also ask: why do generator manufacturers use copper? Well, every diesel generator has a stator coil. Manufacturers use all copper for their construction, but not all. Some use half copper and half aluminum. Others use all-aluminum for the construction of the stator coil.
Alone, all copper generators will last longer, and they are good at cost-saving. Copper and aluminum cannot integrate well even after welding. The point of connecting will always be a weak place.
Copper wire also has less resistance to heating. That makes copper less resistant and gives it a low heat value. The copper wire has a smoother current.
All copper generators are also quieter. Aluminum generators have a higher noise level (by 7dB) than their copper counterparts.
Is it possible to tell whether your generator has aluminum or copper? Professionals can tell by looking at the total power output or by listening to the noise levels. As a user, it will hardly tell unless you can access the stator coil and peel a little paint off the wires. Copper wires are usually purple-red, while aluminum wires are silver.
Some manufacturers use mild steel to make their generator casings. Boli Power ST Series generators come with iron casting and steel frames but a steel frame option. The primary material is cast iron.
Boli Power’s BLG Series of generators comes with a steel frame but cast iron covers. And the internal combustion engine materials make the generators durable. They are hardy and easy to maintain.
The alloy steel is perfect for manufacturing the housing or the canopy of the generator. Such a casing provides the extra strength that a generator needs to last a long time.
Other manufacturers use cast iron to manufacture generators.
Will the price of generator materials rise or fall in the future?
Now we know the primary materials that generator manufacturers use. But what is the industry’s future speculation on the price of some of these materials?
Here is what the future for these materials looks like:
Iron ore price forecast
In the last quarter of 2020, the iron ore price in the first quarter of 2021 was $150 for metric tonnes. But by 2022, the cost of iron ore is expected to fall to or below $100 for a metric tonne.
By September 2021, the price of iron ore fell to $106 for a metric tonne. The prediction was that prices for iron ore could fall to below $70 per metric tonne by early 2022.
Even with the price slumps, the demand for iron ore remains high through the last half of 2021. The prediction is that the increased demand will continue to 2022, which will drive the prices up. On average, industry experts say that iron ore will be $115 per metric tonne, which could rise and fall due to shocks in the supply chain.
The global production of Iron ore is also going to be on an upward trend by 2025. The prediction is that in the 2021 to 2025 period, there will be a 3.6 percent growth.
The demand for steel goes hand-in-hand with that of iron ore. Iron ore is the raw material that manufacturers use to make steel.
By 2021, the demand for steel in China will be on an upward trend from the last three years. This trend will continue, according to industry experts.
Copper Price forecast for 2022 and beyond
The demand for copper across different industries remains high. For generator manufacturing, copper is going to stay the material of choice for a long time.
In the market, experts look at copper as a good sign of the prevailing economic health status.
The demand for copper is so high. Some quarters in the market say that the price per tonne could get as high as $20,000.
By January 2021, the copper price was $3.5 per pound or $7717 per metric ton. The projection in the rise of prices of copper comes from the fact that copper finds its use in the energy sector.
Today, the world is shifting from unsustainable to renewable energy. Copper is playing a big part in this shift.
It finds its use in the transmission, consumption, storage, and generation of electricity. The entire infrastructure of electricity from generation to consumption requires copper. The big economies such as China need more copper to feed their booming energy industries.
By 28 October 2021, the price of copper was $4.44 per pound, quite a rise from the cost of January the same year. The demand for this commodity will keep rising. Today, economic experts refer to copper as the new oil.
If you are asking: is copper going to keep going up? The answer is yes. The price will keep rising. Due to market shocks, it will experience some volatility now and then, but it will keep growing.
Today, more manufacturers of diesel generators are using copper. Few use the combination of aluminum and copper. That is the reason for the rising prices of copper.
Aluminum price forecast for 2022 and beyond
In accord with a report in the Asia Nikkei on 22 September 2021, the price of aluminum was at an all-time high in 13 years.
Aluminum is one of the primary raw materials that most generator manufacturers use. The lightweight and malleable nature of the metal makes it a darling for many industries. Like copper, its demand and price keep going up.
October 2021 reports show that the aluminum price might get to $2921.06 per tonne by the end of the last quarter. Estimates still show that by the same time, in 2022, the price of aluminum will rise to $3086.25 per tonne.
Most people wonder whether the rise in the price of copper will affect the cost of generators too much. The answer is it may, but not with a significant margin.
All the metals that generator manufacturers use for raw materials are recyclable. Nothing goes to waste, even when a generator comes to the end of its life.
The recycling trend is going to help keep the prices of raw aluminum and copper at manageable levels.
Only one thing drives the cost of commodities up or down: the price of raw materials. For generator manufacturers, their primary raw materials are iron, aluminum, and copper.
The prices of these materials determine the cost of making a complete generator. In return, this, transport, and other costs determine the final price the consumer will pay.
The demand for products to use in the renewable energy industry keeps rising. There will be a higher demand for copper and aluminum.
The good thing is that these metals are recyclable. That helps to keep the demand for raw aluminum, iron, and copper a bit low. Generally, the price of generators is going to remain affordable for a long time.
Do you have an old generator, alternator, or motor that you do not use any longer? Consider taking it for recycling.
Such little acts help to lower the demand for raw materials. In return, this helps to keep the prices of consumer products low.