The sharp rise in copper prices to record levels is prompting a growing number of global companies to replace the metal with aluminum across a wide range of industrial applications.

In addition to being significantly cheaper than copper, aluminum is lighter in weight, making it a more efficient option for many industries, including automotive manufacturing, electric vehicles, power cables, and air-conditioning systems.

Industry sources told Reuters that the current copper-to-aluminum price ratio of around 4.2 times has made substitution increasingly attractive from an economic standpoint.

For comparison, aluminum costs roughly one-quarter as much as copper, while offering around 61% of copper’s electrical conductivity.

However, switching materials is not an immediate process. Companies must evaluate the costs of modifying production lines, redesigning components, and reinvesting in manufacturing facilities before replacing copper with aluminum.

Electric vehicles accelerate aluminum adoption

In the automotive sector, aluminum usage has expanded alongside the growth of electric vehicle production. Beyond reducing manufacturing costs, aluminum’s lower weight — roughly 3.3 times lighter than copper — helps improve energy efficiency and extend vehicle driving range.

Ferrari is among the manufacturers that began using aluminum wiring in its 296 model last year.

Ferrari told Reuters: “In addition to reducing cable cross-sectional area, this solution delivers weight savings of between 15% and 20% for the entire wiring harness.”

BMW has also used aluminum conductors since 2011 in its compact vehicle lineup, later expanding the technology to both low- and high-voltage electrical systems in its latest generation of electric vehicles.

Several Chinese EV manufacturers, including Avatr, XPeng, and Xiaomi, have reportedly adopted aluminum wiring as part of efforts to reduce costs and vehicle weight.

Toyota said it continues to evaluate aluminum as an alternative to copper depending on application requirements, but currently has no plans to replace complete vehicle wiring systems.

Power cables and air conditioning move toward aluminum

Beyond the automotive industry, the shift from copper to aluminum has become increasingly visible in the power cable sector.

Global cable manufacturer Nexans estimates that planned worldwide investment in electricity grids, which could reach nearly €10 trillion by 2030, will continue to support demand for aluminum.

The company said copper will remain the preferred material for highly technical applications, but aluminum is expected to capture a larger share of grid expansion projects due to its lower cost and greater availability.

Prysmian, the world’s largest cable producer, has also reported rising aluminum usage among its customers in recent years. Aluminum-based materials now account for around 40% of the cable materials used by the company, a higher share than five years ago.

“Grid resilience and data centers are expected to experience strong growth in both sectors,” Prysmian said.

The same trend is evident among utility companies. Energy Queensland, the Australian state-owned electricity distributor, has been replacing copper conductors with aluminum across its network for years.

“Aluminum is more cost-effective, offers nearly the same durability, is lighter in weight, and can span longer distances when installing power lines,” company spokesperson Emma Oliveri said.

In the air-conditioning industry, Japanese manufacturer Daikin Industries has also outlined a cost-reduction strategy centered on replacing copper with aluminum.

In its 2025 annual report, the company wrote: “Maximizing cost savings through the transition from copper to aluminum.”

Similar initiatives have been adopted by Lennox International and Carrier Global, both of which have developed aluminum coil technology for air-conditioning systems and heat pumps.

Beyond reducing product weight, aluminum is also said to improve corrosion resistance, particularly in coastal environments.

Bitcoin traded around the $59,000 level on Wednesday after plunging to a 21-month low of $57,800, its weakest level since mid-September 2024.

The sharp correction comes as institutional investors continue to reduce exposure, with spot Bitcoin exchange-traded funds recording more than $222 million in net outflows on Tuesday, extending the recent streak of withdrawals.

Uncertainty surrounding developments between the United States and Iran has also added to investor caution, weighing on the world’s largest cryptocurrency.

US-Iran tensions pressure risk appetite

Geopolitical uncertainty remains elevated after Iran said on Tuesday that it would not meet with senior US envoys who traveled to Doha, Qatar, following last week’s military tensions.

Iranian officials added that both sides still need to finalize the terms of the ceasefire agreement signed two weeks ago before moving on to more complex issues, including potential restrictions on Tehran’s nuclear program.

Meanwhile, the Qatari government confirmed that US envoys Jared Kushner and Steve Witkoff would meet with Qatar’s prime minister to discuss ongoing US-Iran talks and regional developments, but no high-level meetings between Washington and Tehran are currently scheduled.

These developments underscore the fragility of the recent ceasefire agreement and increase uncertainty over the prospects for a lasting peace deal.

The rise in uncertainty has weakened investor appetite for risk assets, helping push Bitcoin down to a 21-month low of $57,800 on Wednesday.

Any collapse in negotiations or renewed military escalation between the two countries could further damage market sentiment and trigger another wave of selling in cryptocurrencies.

Institutional selling drives Bitcoin to fresh yearly lows

Institutional demand continued to weaken at the start of the week. Data from SoSoValue showed that US-listed spot Bitcoin ETFs recorded net outflows of $222.64 million on Tuesday, following $231.10 million in withdrawals on Monday.

Tuesday marked the ninth consecutive day of net outflows since mid-June, highlighting fading institutional appetite for Bitcoin exposure.

If the trend continues throughout the week, Bitcoin could face additional downside pressure in the near term.

Could quarter-end portfolio rebalancing support Bitcoin?

A research report published by K33 Research on Tuesday suggested that quarter-end portfolio rebalancing could provide short-term support for Bitcoin prices.

According to the report, data from the past 18 months show that in nine different months, net ETF flows during the six-day period surrounding month-end — including the final three trading days of a month and the first three trading days of the following month — differed significantly from the prevailing trend during the rest of the month.

A K33 Research analyst said: “In several cases, months in which Bitcoin underperformed the S&P 500 were followed by stronger ETF inflows around month-end and at the beginning of the next month.”

The analyst explained that this behavior is consistent with portfolio rebalancing, as investors may increase Bitcoin exposure after periods of relative underperformance in order to restore targeted asset allocations.

However, the relationship between portfolio rebalancing and Bitcoin ETF flows has not been entirely consistent. The other nine months in the sample did not exhibit the same pattern, suggesting that rebalancing is not a permanent driver of Bitcoin ETF flows but rather one of several factors influencing institutional demand.

Even so, the pattern has become more evident over the past four quarters. If it continues, quarter-end portfolio rebalancing could provide meaningful support for Bitcoin and potentially help fuel a short-term rebound during the opening trading sessions of July.

Oil prices fell more than 1% on Wednesday as negotiations between the United States and Iran continued in an effort to reach a final agreement to end the war between the two countries, while investors awaited US petroleum inventory data.

Brent crude futures declined by $1.14, or 1.6%, to $71.81 per barrel by 08:59 GMT, while US West Texas Intermediate crude futures fell $1.11, or 1.6%, to $68.39 per barrel.

“The stalled talks between the United States and Iran are raising concerns about fresh supply disruptions,” said Tamas Varga, analyst at PVM Associates. “On the other hand, investors remain confident that any issues hindering the negotiations will eventually be resolved.”

He added: “Overall, the bearish trend remains intact, although hard data such as falling inventories or another closure of the Strait could quickly change market sentiment.”

Indirect technical talks between the United States and Iran are currently taking place in Doha, mediated by Qatar and Pakistan, according to a source with direct knowledge of the discussions who spoke to Reuters on Wednesday.

Jared Kushner, US President Donald Trump’s son-in-law, and special envoy Steve Witkoff arrived in Doha for what the White House described as “high-level” talks on Tuesday. However, both Iran and Qatar said the US delegation would meet with mediators rather than Iranian officials directly.

Largest quarterly loss in years

Brent crude fell by roughly $45 per barrel during the second quarter, marking its largest quarterly decline since the 2008 global financial crisis.

US crude futures dropped by around $31 per barrel, their steepest quarterly decline since 2020, when the COVID-19 pandemic triggered a collapse in global oil demand.

The losses followed progress toward ending the conflict in the Middle East after prices had surged sharply in March following the outbreak of hostilities.

After five consecutive monthly increases, analysts lowered their 2026 oil price forecasts for the first time since the start of the Iran war, as shipping activity through the Strait of Hormuz resumed, easing concerns about prolonged supply disruptions, according to a Reuters survey.

Oil tanker traffic through the strategic waterway has started to recover, with US Vice President JD Vance saying that oil flows through the Strait have returned to pre-war levels.

US inventories in focus

Investors are now awaiting official US petroleum inventory data from the Energy Information Administration, due at 14:30 GMT on Wednesday.

Market sources said US crude oil inventories declined again last week, according to figures released by the American Petroleum Institute on Tuesday.

Sterling fell for the first time in a week on Wednesday as a stronger US dollar gained support from rising Treasury yields ahead of key labor market data, while investors awaited comments from new Federal Reserve Chair Kevin Warsh.

The pound slipped 0.23% to $1.3234 after advancing in each of the previous four sessions, its longest daily winning streak in a month.

Sterling ended June down 0.2%, extending its decline in the first half of the year to 1.6%, marking its weakest start to a year since 2022, when it fell nearly 10% between January and June.

Political uncertainty has also added to investor concerns. With Labour Prime Minister Keir Starmer preparing to step down, markets are questioning whether leading contender Andy Burnham can revive the British economy without placing additional strain on already stretched public finances.

The dollar’s resurgence, supported by the strength of the US economy and equity markets, has been a major factor weighing on sterling and other currencies.

Against the euro, however, sterling performed better during the second quarter, gaining 1.4% and trading near its strongest level since last August.

UK rate expectations shift

Expectations for additional Bank of England rate hikes this year have eased since tensions in the Gulf began to subside, allowing oil prices to retreat toward pre-war levels.

Money markets currently assign a 90% probability that the Bank of England will raise interest rates before year-end, compared with earlier expectations that had priced in as many as three rate increases.

The Bank of England is scheduled to meet later this month to discuss monetary policy, although economists broadly expect interest rates to remain unchanged.

US jobs data in focus

Among the most important events for currency markets this week, including sterling, is Thursday’s US employment report, which could either reinforce or challenge growing expectations that the Federal Reserve may raise interest rates again in the coming months.

Central bank governors from around the world are gathering this week in Sintra, Portugal, for the European Central Bank’s annual forum.

Federal Reserve Chair Kevin Warsh will participate in one of the forum’s sessions before delivering remarks on Wednesday.

Given his preference for concise communication and limited public commentary from Federal Reserve officials, investors will closely scrutinize his remarks for clues about the future path of US interest rates.

Bank of England Governor Andrew Bailey is also scheduled to speak on Wednesday.

“Andrew Bailey may be the person to watch,” said David Stritch, strategist at Caxton. “The Bank of England is currently the most balanced among major central banks in terms of policy direction, and so far Bailey has remained largely vague about the future path of policy.”