China’s copper boom: record output amid global ore shortage

Analysts predict that China’s refined copper output will reach an unprecedented level in 2025. 

The surge in output is attributed to its expansive smelting industry, which is thriving despite a global copper ore deficit that has led to the closure of some international competitors, according to a Reuters report.

China, already responsible for over half of the world’s refined copper, is expected to see its production increase by 7.5% to 12% this year, exceeding last year’s record of 13.64 million metric tons, according to projections from five analysts in the report.

Dominance

China’s increasing copper output is solidifying its industry dominance by consuming a large portion of the scarce copper concentrate, which is essential for smelters.

This has put significant pressure on competing smelters globally.

The concentrate supply began to shrink in late 2023 due to slow supply growth, mine closures, and a rapid expansion of smelting capacity, especially in China. 

This scarcity drove processing fees—what smelters earn for converting concentrate into metal—to unprecedented lows, severely impacting profitability and leading some smelters outside of China to halt production.

According to Alice Fox, a commodities strategist at Macquarie Group, Chinese smelters have increased output more rapidly than concentrate imports.

This was achieved by depleting inventories and utilising scrap materials obtained from government-sponsored consumer goods trade-in programs.

Fox was quoted in the report as saying:

Chinese refined production has been impressively strong year to date despite tight concentrates and low treatment charges.

Output

In the first half of the year, China’s refined copper output increased by 9.5%. 

This growth was largely due to state-of-the-art smelting plants, which managed to offset some losses by boosting revenue from byproducts like sulphuric acid and rare elements.

Meanwhile, China’s copper concentrate imports saw a 6.4% rise in the first half of the year, significantly exceeding the 0.3% to 0.87% increase in global ore supply that analysts had predicted for 2025. 

This surge in imports led to a shortage of copper ore for smelters in other regions.

For instance, Sinomine Resource Group in China recently announced the temporary suspension of operations at its Tsumeb plant in Namibia due to a lack of concentrate.

In February, Glencore initiated maintenance at its Philippine copper smelter, attributing the decision to difficult market conditions.

Global refined copper output is projected to increase by 0.9% to 2% this year.

Notably, China’s refined copper production is anticipated to outpace this growth, leading to its global share reaching 57%, as reported by Benchmark Mineral Intelligence (BMI).

Demand

Growth in China’s copper output is being driven by stronger-than-expected exports and increased investment in the power grid sector.

This has led analysts to raise their copper demand forecasts.

BMI has increased its forecast for China’s copper demand growth this year to 3.8% from an initial 2.9%, while Macquarie has raised its forecast to 4.2% from 2.4%.

This significant jump in output is also anticipated to reduce China’s refined copper imports. In 2024, these imports amounted to 3.74 million tons, accounting for approximately 20% of the national demand.

BMI predicts an 8% decline in these imports for 2025.

Refined copper imports declined by 8.6% in the first half of the year. This reduction is partly attributed to traders redirecting more shipments to the United States, aiming to preempt potential copper tariffs threatened by US President Donald Trump since February.

Despite an increase in supply, the market found support from a surge in shipments to the US, with benchmark copper prices still showing an 8.8% year-to-date gain.

However, Trump’s recent announcement of 50% tariffs on copper pipes and wiring surprised markets by being less severe than anticipated, notably excluding copper ores, concentrates, and cathodes. 

BMI’s Zhao Yongcheng believes these weaker-than-expected tariffs are unlikely to significantly affect Chinese copper production or demand.

The post China’s copper boom: record output amid global ore shortage appeared first on Invezz