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China 2025 copper output set to hit record high despite feedstock shortages

1st August 2025

By: Reuters

  

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BEIJING  - China's refined copper output is set to hit a record high in 2025, analysts say, as its giant smelting sector powers through a global shortage of copper ore that is forcing some overseas competitors out of business.

Refined copper production in China, which already accounts for more than half of the world's output of the metal, will climb between 7.5% and 12% this year and surpass last year's record high of 13.64-million metric tons, according to estimates from five analysts.

Copper is vital for power, construction and manufacturing, and growing output in the world's top producer and consumer is sucking in scarce copper concentrate, the main ingredient for smelters, increasing pressure on struggling competitors and cementing China's dominance over the industry.

Available concentrate began tightening in late 2023 as anaemic supply growth was worsened by mine closures and rapidly expanding smelting capacity, particularly in China. That pushed processing fees - what smelters are paid to turn concentrate into metal - to record lows, slashing profitability and forcing some smelters outside China to pause production.

Chinese smelters have managed to grow output faster than concentrate imports by running down inventories and using scrap from the government's consumer goods trade-in programmes, said Alice Fox, commodities strategist at Macquarie Group.

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

China's refined copper output grew 9.5% in the first half of the year, with many of its state-of-the-art smelting plants partly offsetting losses with growing revenue from byproducts, particularly sulphuric acid and rare elements.

China's copper concentrate imports, meanwhile, grew 6.4% in the first half of the year, well ahead of the 0.3% to 0.87% increase in global ore supply analysts had forecast for 2025.

That left smelters in other regions with insufficient copper ore to process. China's Sinomine Resource said last month it had temporarily paused operations at its Tsumeb plant in Namibia because of a concentrate shortage.

Glencore put its Philippine copper smelter into maintenance in February, citing challenging market conditions.

Analysts expect global refined copper output to grow between 0.9% and 2% this year. With China's output rising faster, its share of global refined copper production will rise to 57% this year, according to consultancy Benchmark Mineral Intelligence (BMI).

BETTER DEMAND

The growth in China's output is being driven by stronger-than-expected exports plus growing investment in the power grid sector, both of which are leading analysts to revise up their copper demand forecasts.

BMI increased its forecast for China's copper demand growth this year to 3.8%, versus a forecast of 2.9% at the beginning of the year. Macquarie increased its forecast to 4.2% from 2.4%.

The big output jump is also expected to pull down China's refined copper imports, which in 2024 stood at 3.74 million tons or about 20% of national demand. BMI forecasts the imports will fall by 8% in 2025.

Refined copper imports have already dropped 8.6% in the first half of the year, partly as traders sent more cargoes to the United States to beat the copper tariffs that US President Donald Trump has been threatening since February.

That rush to front-run shipments to the US supported the market against the growing supply, with benchmark copper prices CMCU3 still up 8.8% so far this year. 

Trump on Wednesday surprised markets with pared back tariffs of 50% on copper pipes and wiring, short of the sweeping restrictions threatened and leaving out copper ores, concentrates and cathodes.

The weaker-than-expected tariffs are unlikely to impact Chinese copper production or demand, according to BMI's Zhao Yongcheng.

Edited by Reuters

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