SHANGHAI:

In a bold statement from industry leaders, the China Nonferrous Metals Industry Association (CNIA) emphasized that increasing the use of aluminium and recycled copper is crucial for China as it grapples with dwindling copper supplies. With a growing concern about tight copper concentrate availability, necessary steps must be taken to boost profits and ensure sustainability in a market fraught with challenges.

“The copper industry is at a critical juncture,”

said Ge Honglin, CNIA chairman, during a recent conference. He highlighted that profits for many smelters are increasingly derived from byproducts rather than copper itself, leading some operations into financial distress.

Every November, the Asia Copper Week in Shanghai serves as a pivotal meeting point for global miners and copper smelters, allowing them to establish contracts for copper concentrate and settle treatment and refining charges (TC/RCs) for the coming year. As ore supplies dwindle, these charges, which are essential revenue sources for smelters, are expected to hit a 15-year low by 2025, signaling a substantial shift in the copper marketplace.

To adapt, Ge suggests that using recycled copper can significantly lessen China’s reliance on resources from abroad — currently sitting above a staggering 70%. According to his forecasts, the volume of recycled copper in China is set to rise from 2.5 million metric tons in 2024 to as much as 3.5 million tons by 2030. This shift not only streamlines operations but also pushes Chinese companies toward obtaining resources from politically stable regions globally.

In an innovative move,

China has enacted policies allowing increased imports of recycled copper and established a state-backed recycling company aimed at reducing dependency on virgin materials. These initiatives are expected to strengthen the nation’s resource security in the long run.

A Shocking Aluminium-Copper Revelation!

The CNIA’s chairman also pointed out the economic advantages of using aluminium over copper, given that copper prices are currently over 3.5 times higher than that of aluminium. Given that China imports around 60% of its aluminium production resources, the country's investments in foreign bauxite—exceeding 8 billion tons and equating to over a quarter of global reserves—are strategic moves to bolster its aluminium capacity.

As the industry faces mounting pressures,

Ge has called for consolidation within China's copper refining sector, advocating for mergers that would empower companies in negotiations for raw materials. This proactive approach highlights China’s ambition to lead in resource management and production efficiency, laying a robust foundation for the country’s future in the nonferrous metals industry.

The Bottom Line?

China's strategy to rely more on aluminium and recycled copper is not just an economic necessity; it's a revolution that could redefine their standing in the global metal markets! Stay tuned to see how these bold moves will reshape the industry landscape!