The China Nonferrous Metals Industry Association (CNIA) has called for increased utilization of aluminium and recycled copper to address the ongoing shortages of copper resources, which are impacting profits for Chinese smelters. This statement was made during a conference amid growing challenges in the copper industry.
Current Industry Challenges:
Ge Honglin, chairman of CNIA, highlighted that many smelters are facing severe challenges, with profits increasingly coming from byproducts rather than copper itself. Some smelters are already operating at a loss due to tight copper concentrate supplies.
The upcoming Asia Copper Week in Shanghai will see global miners and smelters negotiate contracts for copper concentrate, with treatment and refining charges (TC/RCs) expected to hit a 15-year low in 2025.
Recycled Copper Potential:
Ge emphasized that increasing the use of recycled copper could significantly reduce China’s dependence on imported resources, which currently exceeds 70%.
The volume of recycled copper in China is projected to rise from 2.5 million metric tons in 2024 to 3.5 million tons by 2030. This shift encourages Chinese companies to seek more stable sources of recycled copper abroad.
Government Initiatives:
To bolster recycling efforts, China has permitted more imports of recycled copper and established a state-backed recycling company aimed at reducing reliance on primary raw materials.
Ge also advocated for mergers and restructuring within the copper refining sector to enhance negotiating power for purchasing concentrate.
Aluminium as a Substitute:
The economic advantages of substituting aluminium for copper are becoming more apparent, with copper prices currently more than 3.5 times higher than those of aluminium.
Ge noted that while China imports 60% of the resources needed for aluminium production, it has acquired over 8 billion tons of foreign bauxite, which is refined into alumina, the primary ingredient for aluminium.