Daikin Industries will halve the amount of copper used in air conditioners from the current 90,000 tonnes per year by fiscal year 2024, according to a report in Nikkei Asia.
The international price of copper has risen by 40 to 50 per cent in the past year amid expectations for an economic recovery from the COVID-19 pandemic.
Decarbonization trends have meanwhile spurred the change to electric vehicles, which require copper for their components.
In response to the increased pressure on profits, Daikin plans to use more materials like aluminum, ahead of other companies, the report said.
The soaring prices of copper may stimulate competition for technological development in the search for alternative materials.
The London Metal Exchange three-month futures, a key benchmark, hit a record high of $10,700 per tonne in May for the first time in about 10 years, which was more than double the price set in the spring of 2020. It is currently trading around $9,000 per tonne.
Daikin will halve the amount of copper used in Japan by fiscal 2023 and reduce usage overseas as well. Copper in heat exchangers will be replaced with aluminum, which is one-third to one-fifth the price of copper.
In 2012, Daikin began to use aluminum in commercial air conditioners and this will be extended to residential units.
"A rise in the price of copper has a great influence on profit and loss. We will make efforts to reduce the amount of copper used," Hiroshi Niwayama, vice president of Fujitsu General., told Nikkei Asia.