China’s Copper Industry Surges Forward Amid Regulatory and Market Pressures

Regulatory Tightening to Control Overcapacity

China, the world’s largest producer of refined copper, continues to expand its output despite increasing economic and regulatory pressures. To curb overcapacity challenges, the Chinese government has introduced stricter policies on copper smelter construction, requiring companies to secure sufficient mine supply through direct ownership or equity stakes.

Key Regulatory Measures:

Industry analysts see this as a strategic move to avoid past pitfalls in steel and aluminum sectors—ensuring a more stable and sustainable copper industry in the long run.

China’s Dependence on International Supply

Despite efforts to bolster domestic mining, China heavily relies on imported copper concentrates, with about 85% of its supply coming from international sources. In 2023 alone, China produced 12 million tons of refined copper while mining only 1.7 million tons domestically.

China’s Copper Supply Challenges:

To counterbalance its reliance on imports, China is pushing for long-term contracts with global copper producers—a move that is projected to enhance supply security.

Democratic Republic of Congo (DRC): A Key Supplier

The Democratic Republic of Congo (DRC) has emerged as China’s largest supplier of refined copper. Thanks to increased Chinese investments in the DRC’s mining sector, exports to China have surged significantly.

Key Developments:

This expanding partnership highlights China’s strategy of securing raw materials and diversifying its copper supply sources.

Copper Market Outlook and Risks

Despite China’s aggressive copper expansion, the global market faces several uncertainties heading into 2025. Analysts predict a refined copper surplus, although supply chain constraints could limit its impact.

Major Market Influences:

Mines in the DRC, Mongolia, and Russia are expected to drive this increase. However, uncertainty remains due to economic fluctuations and geopolitical developments.

Geopolitical and Economic Factors at Play

The looming threat of US tariffs and trade uncertainties pose major downside risks for copper prices. Meanwhile, China’s recent stimulus measures have yet to show significant effects on metal demand.

Critical Factors Impacting Copper Prices:

However, market analysts anticipate a stronger copper price performance in Q4 2024, driven by improving sentiment and seasonal demand increases. Copper prices are expected to average $10,265 per tonne, although fluctuating economic conditions may introduce volatility.