Market Trends of China Copper Industry
Growing Demand from Electronics Industry
- Copper is one of the most-used metals globally, with electronics accounting for three-quarters of its use. It is ductile, malleable, and an excellent heat and electricity conductor. Copper also has good corrosion resistance, making it one of the best metals to be used for electrical transmissions. It is mainly used in wires, cables, transformers, motors, switches, communication cables, and household electrical circuits.
- China is the largest base for electronics production in the world. As per the estimates by ZVEI (German Electrical and Electronic Manufacturers' Association), China represents a production volume of EUR 2.60 trillion (~USD 2.85 trillion), which corresponds to 52.3% of the global electronic output.
- In 2022, as per the Statistics released by the Ministry of Industry and Information Technology, the added value of China's electronic information manufacturing industry above the designated size increased by 7.6% year-on-year, exceeding the industrial and high-tech manufacturing industries by 4% and 0.2%, respectively.
- However, as per the statistics by the National Bureau of Statistics, China, in 2022, the investment in fixed assets in the electronic information manufacturing industry increased by 18.8%, year-on-year basis.
- The country serves the domestic demand for electronics and exports electronic output to other countries. With an increase in disposable incomes of the middle-class population, the demand for electronic products is projected to increase from the domestic as well as emerging countries, in the coming years.
- Overall, such above-mentioned trends are indicative of the lucrative demand for copper from the electronics industry.
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Increasing Investments in the Construction Industry
- Copper is a prime choice in the building and construction industry owing to its aesthetic value, durability, low cost of maintenance, low embodied energy, and recyclability. Within the construction industry, copper is most often used for cladding, electrical wiring, heating systems, rainwater systems, roofing, and others.
- The construction sector is a key contributor to China's continued economic development. China is amid a construction mega-boom. According to the National Bureau of Statistics of China, the value of construction output accounted for CNY 31.2 trillion (~USD 4.5 trillion) in 2022, up from CNY 29.3 trillion (~USD 4.2 trillion) in 2021. Moreover, as per the forecast given by the Ministry of Housing and Urban-Rural Development, China’s construction sector is expected to maintain a 6% share of the country’s GDP going into 2025.
- The growing demand for housing is likely to drive residential construction in the country, both in the public and private sectors. The Chinese government has rolled out massive construction plans, which include making provisions for the movement of 250 million rural people to its new megacities over the next ten years, creating a major scope for copper in various applications in the construction industry.
- China’s 14th Five-Year Plan focuses on new infrastructure projects in energy, transportation, water systems, and new urbanization. According to estimates, overall investment in new infrastructure during the 14th Five-Year Plan period (2021-2025) will reach roughly CNY 27 trillion (~USD 3.7 trillion).
- Moreover, the five-year is also focused on making the construction sector more sustainable and quality-driven. China is focusing on increasing the construction of prefabricated buildings to reduce pollution and waste from construction sites. Further, the construction industry will be transitioning to modernized practices, which will increase the demand for materials utilized in the industry, like copper.
- All such above-mentioned factors are expected to positively impact the demand for copper from the construction industry in the coming years.
