Global Impact of Chinese Red Copper on the Copper Industry

Global Impact of Chinese Red Copper on the Copper Industry

Copper is an essential industrial metal that is a vital component of many of the world’s most sophisticated products and technologies.global impact chinese red copper Electrified vehicles (EVs) in particular require significantly more copper than internal combustion engine cars. According to research from Wood Mackenzie, the average ICE vehicle contains 22 kilograms of copper, while hybrid and fully battery-powered EVs contain 40 kilograms and 55 kilograms respectively.

Unlike a conventional car, where copper is used primarily in the motor, an EV requires much more copper to power the electronics and batteries.global impact chinese red copper As a result, the EV sector will drive significant growth in copper demand, particularly from Asia and Europe.

China is the world’s leading EV market and the second largest consumer of refined copper.global impact chinese red copper In the near term, a weak property market in China may limit new construction and domestic demand, but higher military and national security spending and a revitalization of global manufacturing should offset this constraint.

With the China solid waste import ban in effect, copper concentrate and refined copper imports have risen in response. This has produced a number of effects within the material supply chain, including increased primary refining production and scrap consumption. This has, in turn, produced increasing environmental impacts within China and globally.

The analysis presented here addresses these impacts using explicit modeling of mine-level opening, closing and capacity utilization decisions, economic modeling accounting for cascading effects throughout the copper supply chain, and cost-driven optimization models determining scrap consumption changes between China and RoW. By addressing these factors, the methodology presented here is unique in its contributions to copper supply chain modeling.

In addition to addressing the impacts of copper mining, the model incorporates a range of data sources to provide the most comprehensive and up-to-date analysis available on the Chinese copper market. These include official production and consumption figures from the ICSG, the International Copper Association and Minsur; copper pricing data from Fastmarkets, CRU Group and Shanghai Metals Market; energy, water and unit CO2e emissions data from Northey et al. and from Ecoinvent; and China refined copper imports from American Metal Market and UN Comtrade.

The results of the model indicate that the China scrap import ban, if implemented at the rate suggested by the government, would have substantial impacts on the global copper industry, especially in the near-term. The impact of the ban is largely due to increased primary refining production, resulting in an increase in China’s CO2e emissions by 35 Mt at 2040 relative to baseline. This is partly offset by a decrease in global copper recycling and fabrication that is driven by increased primary refining production. However, the impacts of the ban are exacerbated by lower secondary refining production in RoW. Therefore, a key recommendation is for the government to focus on encouraging the development of new scrap production in RoW. This would help to mitigate the impacts of the copper ban on the environment.

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