CCIE 2025: SMM Insights on Copper Billet Industry Landscape and Outlook

On April 22, at the CCIE 2025 SMM (20th) Copper Industry Conference & Copper Industry Expo - Copper Pipe and Billet Processing Industry Development Forum, hosted by SMM Information & Technology Co., Ltd., SMM Metal Trading Center, and Shandong Aisi Information Technology Co., Ltd., with Jiangxi Copper Corporation and Yingtan Land Port Holdings Co., Ltd. as the main sponsors, Shandong Humon Smelting Co., Ltd. as the special co-organizer, and Xinhuang Group and Zhongtiaoshan Nonferrous Metals Group Co., Ltd. as co-organizers, Huang Yutong, Senior Copper Analyst at SMM, shared insights on the supply-demand pattern and development of copper billets in 2025.

01 Insights into 2025: Copper Billet Market Supply Landscape

SMM Analysis of National Copper Billet Categories, Brass Billet Production Processes, and Representative Enterprises in 2024

Brass billets dominate the national copper billet market, with continuous casting processes becoming mainstream in brass billet production in recent years. Meanwhile, numerous enterprises are actively expanding their presence in the continuous casting and extruded billet sectors, intensifying market competition.

►SMM Analysis

Brass billets account for up to 80% of the national copper billet market, holding an absolute dominant position. Among them, ordinary brass billets (such as H62) account for over 50% of the market share, offering good mechanical properties, ease of processing, and corrosion resistance, and are widely used in valves, hardware, decorations, etc.

Continuous casting billets are produced through a continuous casting process, offering high production efficiency and low costs. In 2024, continuous casting billets accounted for approximately 75% of the copper billet market share. A large number of enterprises have entered the continuous casting billet market, leading to severe overcapacity and fierce competition among enterprises, resulting in a gradual decline in processing fees. Large copper billet plants have the capability to produce both continuous casting and extruded billets, leveraging their scale and technological advantages to capture a significant portion of the market share. In contrast, enterprises producing only extruded billets rarely produce continuous casting billets and primarily focus on extruded billet orders.

SMM Analysis of National Brass Billet Capacity Regional Distribution and Enterprise Scale Proportion in 2024

Brass billet capacity is highly concentrated in Zhejiang, Jiangxi, Guangdong, and Anhui provinces. Large enterprises dominate the capacity landscape, highlighting the advantages of industrial clusters.

►SMM Analysis

Reasons: Zhejiang and other regions have accumulated a profound industrial foundation over the years, with a well-established and mature upstream-downstream industrial chain supporting system, forming industrial clusters that attract investment and enterprises. Additionally, convenient transportation facilitates raw material procurement and product transportation and sales, and proximity to consumer markets enables rapid response to customer needs.

Outlook: Under industrial upgrading, these regions may increase their investment in technological R&D for brass billet production processes and new material applications, advancing towards the high-end brass billet sector. They may also drive the development of surrounding areas through industrial transfer and regional cooperation.

Analysis of Brass Billet Raw Material Composition and Secondary Copper Raw Material Imports

Imports of secondary brass raw materials account for 40%: In 2024, 2.25 million mt of secondary copper (alloy) raw materials were imported, with secondary brass raw materials accounting for 15.13% of the total annual imports, totaling 340,400 mt. From January to February 2025, a cumulative 382,500 mt of secondary copper (alloy) raw materials were imported, up 12.86% YoY. During the same period, 49,700 mt of secondary brass raw materials were imported. In 2025, the US supply landscape will change due to trade and tariff impacts.

►SMM Analysis

In 2025, affected by the tense Sino-US trade relations and tariff uncertainties, the US's position as the largest supplier of secondary copper raw materials continues to weaken. In January, US copper scrap exports to China were 39,400 mt, down 10.32% MoM, accounting for 20.81% of China's total imports. In February, exports to China dropped to 31,400 mt, down 20.35% MoM, with its share declining to 16.22%. In March, exports to China plummeted to 22,500 mt, down 28.34% MoM, with its share significantly dropping to 11.85%, ranking second. From the pie chart of the proportion of secondary brass raw material import sources, the US accounts for 45%, and its supply reduction will inevitably impact the overall import landscape.

On the other hand, the European market has seen a decline in enterprise purchase willingness due to high rejection rates by customs authority and rising prices, making it difficult to maintain stable import volumes.

2025 Brass Billet Industry Bottlenecks: Analysis of Production Decline and Influencing Factors

In 2025, the brass billet industry faces bottlenecks in production decline and low operating rates due to factors such as tariffs, raw materials, environmental protection, and market demand.

►SMM Analysis

In 2025:

1. Tariff policies: Downstream exports of brass billets face higher costs and trade barriers.

2. Tight raw material supply.

3. Lead-free trends eliminate outdated capacity: For example, the EU will implement stricter environmental regulations in 2025.

4. Weak market demand: The post-real estate cycle demand remains weak, with the hardware and sanitary ware sectors continuing to slump. Coupled with volatile copper prices, downstream stockpiling is cautious, and insufficient demand leads to a decline in enterprise operating rates and stagnant production growth.

02 Exploring 2025: Copper Billet Market Demand Trends

Downstream Application Structure of Brass Billets (Sanitary Ware Hardware Dominates)

In recent years, the real estate market has been in a downturn. From the perspective of real estate development funding, both the cumulative year-on-year growth of development investment completed and funding sources have shown a downward trend. The cumulative year-on-year growth of commercial housing sales has mostly been negative, indicating significant sales pressure. After the 2025 Chinese New Year, most enterprises have seen a moderate recovery in orders, but demand for sanitary ware remains weak. It is expected that the real estate market recovery in 2025 will be limited, with new housing starts and completion areas likely to remain low, thereby dragging down the demand for copper in construction.

Pressure from the Real Estate Downturn: "Increased Volume, Lower Prices" in China's Sanitary Ware Market in 2024

In 2024, China's sanitary ware exports saw double-digit growth in volume but a general decline in unit prices, showing a trend of "increased volume, lower prices," intensifying market competition and compressing profits.

Analysis of the Impact of NEV and Mobile Phone Industry Development on Brass Billet Demand

Although NEV production continues to grow, the growth rate has slowed down. The scale of production and sales, as well as the relatively high copper density, drive the demand for brass billets. The mobile phone industry has seen minor fluctuations in production, with limited brass billet usage per product, resulting in a relatively weak overall driving effect on brass billet demand.

►SMM Analysis

Policy support for the NEV industry in various countries (such as car purchase subsidies and tax incentives), along with consumers' increased environmental awareness and acceptance of NEVs, have driven production growth. SMM expects global NEV production to continue climbing in the coming years, but the growth rate will slow down.

China's mobile communication handset production has seen some fluctuations in recent years but has not shown a significant upward or downward trend overall. In reality, the smartphone market has gradually become saturated. Additionally, brass billets can be used in mobile phone manufacturing for components such as electrical connectors and shielding cases, but compared to NEVs, the demand for brass billets in mobile phones is relatively limited.

Limited Demand Support for Brass Billets from the Air Conditioning Industry - Based on Production and Sales Data

The air conditioning industry has a massive production volume in the refrigeration sector, with both household and commercial air conditioners having considerable market ownership and new demand. The large production base leads to a corresponding increase in brass billet usage. Large air conditioning manufacturers such as Midea and Gree produce tens of millions of units annually, inevitably driving up brass billet usage.

►SMM Analysis

The refrigeration industry accounts for 9% of the downstream application of copper billets, providing strong support for the copper billet market. In 2023, China's air conditioning production was 168 million units, and in 2024, it reached 202 million units, up 20.24% YoY.

Growth in air conditioning production drives brass billet demand: As a key material for condenser tubes and valves, each air conditioner consumes approximately 1.8-2.2 kg of brass billets, resulting in a demand of about 36,000-44,000 mt in 2024.

Air conditioning production has a pronounced seasonal pattern. In March, household air conditioning production surges, with domestic demand expected to bring significant growth. Despite Trump's announcement of tariff hikes on home appliances, air conditioning exports have not been significantly impacted for the time being. SMM expects the copper consumption in the home appliance industry to reach 2.22 million mt in 2025, up 0.91% YoY.

03 Outlook: Future Development Trends of the Copper Billet Market

Focus on 2025: The Impact of High Copper Prices on the Brass Billet Market

1. High copper prices suppress downstream orders: In industries such as sanitary ware and hardware, where product profit margins are already limited, a significant increase in costs reduces the price competitiveness of products, leading to decreased purchase willingness among downstream customers and a subsequent reduction in order volumes. 2. The price spread between LME and Comex reaches a record high, resulting in potential losses for imported secondary copper raw materials.

"Reverse Invoicing" and the Fair Competition Review Regulations have a certain inhibitory effect on the supply of domestic raw materials.

►Impact Analysis:

"Reverse Invoicing": 1. Limits the scale of raw material supply; 2. Regional differences in implementation lead to unstable supply.

Fair Competition Review Regulations: 1. Regulates the competitive environment in the raw material market; 2. Provides a buffer period for the implementation of policies.

►Future Outlook:

1. 2025 is a transitional year for "Reverse Invoicing". After full implementation in the future, if resource recycling enterprises face operational difficulties or even exit the market due to policy adjustments, the raw material supply channels for brass billet enterprises may decrease.

2. After the official implementation of the policies, the entry threshold for new enterprises may increase, and existing enterprises need to plan their expansions more cautiously. The suspension of investment promotion efforts by local governments introduces more uncertainties for brass billet enterprises when establishing new capacity or expanding production scale, affecting their future capacity layout and raw material demand planning.

Domestic demand struggles to grow, and breakthroughs in overseas markets may be disrupted.

Domestic: Drag from the real estate sector combined with insufficient drive from emerging industries.

Overseas: Restrictions from trade policies.

►SMM Analysis

►Domestic Demand:

1. Weak demand in traditional industries: The sluggish real estate sector leads to a decline in demand for sanitary ware, with no short-term recovery expected.

2. Insufficient drive from emerging industries: Although the NEV sector is rising, the production of some high-performance alloy components involves technical barriers, limiting participation to only a few enterprises.

►Overseas Markets:

Restrictions from trade policies: The US is an important source of imported secondary copper raw materials. Tariffs have halted the supply from the US and increased procurement costs. Meanwhile, downstream export orders have shrunk due to tariffs. For example, during the peak season for refrigeration orders in March 2025, export orders for sanitary ware and hardware products in Europe and the US were adversely affected.