Increased Use of Recycled Copper and Aluminium Could Help China Address Copper Resource Constraints
On November 13, 2024, the China Nonferrous Metals Industry Association (CNIA) stated that increased utilization of aluminium and recycled copper could help China manage its limited copper resources. Ge Honglin, Chairman of CNIA, emphasized that Chinese smelters face challenges due to constrained copper concentrate supplies, which is impacting their profitability. He noted that smelter profits often come from byproducts, with some operations already suffering losses.
The Asia Copper Week event, held annually in Shanghai, is a critical gathering where global miners and smelters negotiate copper concentrate contracts and set treatment and refining charges (TC/RCs) for the coming year. These charges are an important revenue stream for smelters, but they are expected to drop to a 15-year low in 2025 due to tight ore supplies.
Ge highlighted that expanding the use of recycled copper could reduce China's reliance on foreign copper, which currently stands at over 70%. He projected that China's recycled copper output would grow from 2.5 million tonnes in 2024 to 2.7 million tonnes in 2025, reaching 3.5 million tonnes by 2030. He also encouraged Chinese companies to source recycled copper from politically stable regions abroad to support this shift. To facilitate this, China has eased import restrictions on recycled copper and launched a state-backed recycling enterprise aimed at reducing dependency on primary raw materials.
Additionally, Ge advocated for mergers and reorganizations within China's copper refining industry to enhance industrial consolidation, which would, in turn, strengthen China's negotiating power when purchasing copper concentrate.
Ge also noted the potential economic advantages of using aluminium as a substitute for copper, with copper prices being more than 3.5 times higher than aluminium prices. He pointed out that China currently relies on imports for 60% of the resources needed for aluminium production. However, Chinese companies have secured ownership of over 8 billion tonnes of foreign bauxite, which represents more than a quarter of global reserves.
