SHANGHAI - Chinese copper smelters are likely to further cut production, shut down or extend maintenance to cope with a severe shortage of raw material or concentrate supply next year, participants at a conference in Shanghai said on Wednesday.

Global mine disruptions and smelters expanding capacity at a fast pace have led to extreme competition for copper concentrate and pushed treatment charges - a gauge of concentrate availability - to historic lows.

The concentrate deficit is estimated at more than one million metric tons next year, analyst Zuo Haoen from Minmetals Nonferrous Metals Company told delegates at the CRU World Copper Conference Asia.

Zuo said China's smelters are likely to moderately cut output, shut down, extend maintenance time, delay commissioning of new plants or lower the utilisation rate next year.

China's copper smelting capacity will grow significantly in 2025 by about one-million tons and the utilisation rate will likely fall to 75% or even lower next year, Zuo added.

Earlier this year, Minmetals expected China's copper concentrate consumption to increase by 600 000 tons in 2024, but it has revised the number down to 300 000 t.

On the mine side, the copper mining industry needs around $120-billion deployed by 2030 to fill the supply gap, said CRU consultant Francisco Acuna.

There is "no lack of projects", but many of these have not really moved forward, Acuna said, citing multiple factors including technical and geopolitical issues, permitting, and "the lack of decision making to actually move projects forward".

DEMAND

Copper is expected to be a major beneficiary of the energy transition. It is used in renewable power and electric vehicles, a leading driver of copper demand this year.

Copper demand from electric vehicles in 2030 will likely be 2.5-million tons higher than it was in 2020, said CRU's head of copper and zinc Eric Heimlich at the conference.

Renewable energy's copper demand in 2030 will be 2.4-million tons more than in 2020, while the grid sector could see an extra 2.3-million tons, Heimlich added.

China's real estate sector in 2030 is likely to consume 400,000 tons less copper than in 2020, Heimlich said.

China's copper consumption in 2025 is likely to hit 16.69 million tons, up 2% from 16.34-million tons this year, said Motoki Makita, a general manager from Mitsui & Co.

Copper demand for data centres was only 467,000 tons last year. However, with data centres, AI and cloud services becoming increasingly widespread, copper demand from these sectors is expected to increase rapidly, Makita said.

Looking forward, demand from the robotic sector could add at least two million tons to copper consumption, said Yang Chengxiao, a research director from Minmetals Securities.

Growth in flying vehicles including drones will boost copper demand, while efforts to electrify ships could add 100,000 tons to demand, Yang added.