Global Copper Pipe Giant Unveils Perspectives on Challenges and Opportunities in Secondary Copper Industry

On April 24, at the CCIE 2025 SMM (20th) Copper Industry Conference & Copper Industry Expo - Secondary Copper Industry Green 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, Zhang Junbing, Director of the Secondary Copper Business Department of Zhejiang Hailiang Co., Ltd., elaborated on the downstream consumption status of secondary copper in China.

01 Copper Industry Chain Structure

The copper industry chain is a complete closed-loop system that spans from ore mining to end-use consumption and then to scrap recycling, characterized by globalized division of labor and high recyclability.

The primary copper industry chain accounts for 60%-62%, with global copper ore reserves estimated at approximately 870 million mt (2023 USGS data), providing a static reserve life of only 40 years. The secondary copper industry chain accounts for 38%-40%, and secondary copper can increase the recycling rate of copper resources to over 90% (Note: Based on projections from the 2024 International Copper Study Group (ICSG) data).

►Primary Copper Industry Chain

It also introduced the copper production of major countries such as Chile, DRC, and Peru over the past five years.

►Secondary Copper Industry Chain

1. Sources of Copper Scrap

• Industrial scrap (60%): Off-cuts generated during smelting/processing (e.g., copper shavings, anode slime). Manufacturing scrap (e.g., leftover materials from wire and cable production).

• Post-consumer scrap (40%): Scrap electronic devices (computers, mobile phones), automobiles (motors, wiring harnesses), and construction waste (pipes). 2. Secondary Copper Production Process

• Scrap sorting: High-grade scrap can be directly smelted; low-grade scrap requires disassembly and sorting.

• Disassembly and pretreatment: Mechanical crushing, magnetic separation (to separate iron), eddy current separation (to separate aluminum), and manual sorting (to separate plastic).

• Smelting and refining: Reverberatory furnace/electric furnace smelting: For low-grade scrap, producing blister copper followed by electrorefining. Converter smelting: For high-grade scrap, directly producing copper anode.

3. Distribution of Secondary Copper Industry

• Raw material exporters: US (15% of global exports), Germany (9%), Japan (6%), mainly exporting low-grade copper scrap.

• Processing and consuming countries: China Accounts for 35% of global secondary copper consumption, with Zhejiang Ningbo (imported copper scrap disassembly) and Jiangxi Yingtan (copper scrap refining) as core bases. Southeast Asia: Malaysia and Thailand, relying on free trade zone policies, have become transit and processing centers for European and American copper scrap.

►Secondary Copper - Significant Energy and Economic Advantages

It introduced the upstream copper production situation in the global market over the past five years from the perspectives of mine copper production and refined copper production, as well as the upstream copper production situation in the domestic market over the past five years.

►Domestic Secondary and Primary Copper Production

02 Distribution of Secondary Copper Industry

►Major Distribution Areas of Global Secondary Copper Industry

Major Exporting Countries/Regions

♦North America

US: The world's largest exporter of secondary copper; Canada: Relying on the North American automotive industry chain, mainly exports to the US and East Asia;

♦Europe

Germany: Europe's largest exporter of secondary copper; UK, Netherlands: Relying on port advantages, becoming hubs for European secondary copper trade;

♦Japan

Asia's major exporter, mainly from home appliance and automobile disassembly; "Home Appliance Recycling Law": Mandates recycling of discarded electrical appliances, forming an efficient recycling system;

Major Importing Countries/Regions

♦China: The world's largest importer and consumer, accounting for over 30% of global trade volume;

♦Southeast Asia (Malaysia/Thailand/Indonesia): Close proximity to China, relaxed policies (e.g., Malaysia allows non-metallic processing in bonded zones) attract European and American secondary copper transit and local disassembly;

♦Other countries: South Korea, India: South Korea relies on electronic industry scrap, with a self-sufficiency rate of 30% for secondary copper; India's copper scrap imports have been increasing year by year, mainly used for processing low-end copper products;

Domestic Trade/Processing Hubs

Tongling, Anhui; Daye, Hubei: Combining with local primary copper smelting capacity to collaboratively process copper scrap; Yingtan, Jiangxi: Relying on Jiangxi Copper Corporation, forming an "copper scrap disassembly - smelting - refining" industry chain; Bohai Economic Rim: Linyi, Shandong ("Copper Capital North of the Yangtze River"), Baoding, Hebei (disassembly of scrap wire and cable); Yangtze River Delta: Ningbo, Zhejiang (main port for imported copper scrap), Zhangjiagang, Jiangsu; Pearl River Delta: Foshan, Guangdong (a concentration area for trade in scrap brass and copper alloys).

►Major Distribution Areas of Global Secondary Copper Industry

From 2021 to 2025, global secondary copper exports have shown characteristics of "US dominance and regional differentiation," with countries like Mexico and Saudi Arabia rising due to geographical advantages, while the shares of traditional European exporters have gradually declined.

►US Secondary Copper Export Data

Approximately 30% of global copper scrap supply comes from the US, but after 2023, due to Sino-US trade frictions, domestic solid waste import bans, US domestic recycling policies, and soaring copper prices, the total export volume has shown a fluctuating downward trend.

The US promotes the return of manufacturing through the Inflation Reduction Act, with Mexico and Canada becoming the core of nearshoring supply chains, strengthening the regional circulation of copper scrap.

Mexico and Canada account for over 50%, forming a "North American closed loop"; India and Southeast Asia have become new growth points, with the domestic market further shrinking.

From 2021 to 2025, US secondary copper exports have shown characteristics of "near-neighbor priority and Asian differentiation," with Mexico replacing China as the top destination, and the importance of markets like Canada and India increasing.

China: Imports showed continuous decline in 2022, expected to further decline in 2025: Sino-US trade frictions, tightening of domestic copper scrap import policies (e.g., "solid waste import ban").

Mexico and Canada have become the core destinations for US copper scrap due to the North American nearshoring trend. The Middle East and Southeast Asia, acting as transit hubs, indirectly receive US copper scrap for domestic use (e.g., Saudi Arabia, Malaysia).

►Domestic Secondary Copper Imports

Two Stages of Secondary Copper Imports

Stage 1: Solid waste management stage from 2015 to 2019; Stage 2: Free import stage for secondary copper raw materials from 2020 to 2024.

03 Current Status of Secondary Copper Consumption

►Core Areas of Global Copper Consumption

Power Industry:

• Proportion: 40%-45%

• Application Scenarios: Power transmission (wire and cable, UHV power grids), motors, transformers, communication cables, etc.

Construction Industry

• Proportion: 10%-12%

• Application Scenarios: Wire and cable, copper water pipes, decorative materials (door handles, lamps, etc.).

Transportation Industry

• Proportion: 12%-15%

• Application Scenarios: Wiring for internal combustion engine vehicles, copper used in radiators (23kg/vehicle), new energy vehicles (83kg/vehicle), charging piles (35kg/pile).

Home Appliance Industry

• Proportion: 10%-12%

• Application Scenarios: Air conditioners (accounting for 60% of copper used in home appliances), refrigerators, washing machines' condensers, evaporators.

Electronics Industry

• Proportion: 8%-10%

• Application Scenarios: Semiconductor chips, printed circuit boards, data centers, AI equipment. A 1-megawatt data center uses 65.8 tons of copper, and a GPU server uses three times the amount of copper as a regular server.

According to the latest data from 2024, global copper consumption exhibits a pattern of "Asia-Pacific dominance, emerging market growth, and steady yet evolving trends in Europe and the US," with distinct copper consumption structures across different regions.

♦The copper consumption trend in new energy vehicles (NEVs) is undergoing structural changes, driven by the deep integration of technological advancements, policy support, and the global energy transition.

Copper consumption per vehicle

Battery electric vehicles (BEVs): Copper consumption per BEV reaches 80-120 kg (compared to just 20 kg for traditional internal combustion engine vehicles), primarily concentrated in batteries (current collectors, flexible connections), motors (winding wires), electronic controls (heat sinks), and charging systems (high-voltage wiring harnesses). For example, a BEV with a driving range of 500 km uses approximately 25-38 kg of copper foil in its battery, 12-15 kg of copper in its motor, and 23 kg of copper in its high-voltage wiring harness.

Commercial vehicles: Electric buses consume 224-369 kg of copper, 11-16 times that of traditional internal combustion engine buses, mainly for high-power motors and high-voltage battery systems.

Technological differentiation: Plug-in hybrid electric vehicles (PHEVs) consume approximately 60 kg of copper per vehicle. Fuel cell electric vehicles (FCEVs) may consume even more copper due to the complexity of hydrogen fuel cell systems, but they are not yet widely adopted.

♦Industry chain extension and supporting facility demand

Charging piles: A single DC fast charging pile consumes 60 kg of copper. In 2024, China added over 2 million charging piles, driving copper consumption of 120,000 mt.

Battery recycling: In 2024, China's retired power battery capacity reached approximately 1.2 million mt, with a secondary copper recycling rate of less than 30%. However, with policy support, the target for 2025 is to increase this rate to 40%, which is expected to reduce carbon emissions by 3.24 million mt.

04 Future challenges and opportunities

Growth will be driven by new energy and high-end manufacturing, but resource constraints and capacity bottlenecks persist.

Projections: Global apparent copper cathode consumption is expected to reach 28.5 million mt in 2025, with a global copper deficit of 180,000-500,000 mt anticipated for the same year. Over the next decade, the global copper supply deficit is projected to be 10 million mt.

►Key challenges:

Geopolitics and trade policies: Increased tariffs on copper will lead to a shift in global inventory towards North America, with a 30% decline in LME inventory, but China's copper cathode imports will decrease to 150,000 mt per month. This will also introduce uncertainty in copper prices, with sharp fluctuations in the price spread between COMEX and LME.

Penetration rate of alternative technologies: Advances in aluminum as a substitute for copper technology, such as Tesla Model 3 adopting aluminum battery busbars, reducing copper usage per vehicle by 8 kg; the penetration rate of composite current collectors is expected to reach 18.8% in 2,025.

Technological bottlenecks: Recycling technology needs improvement. The recycling utilization rate of power batteries exceeds 85%, but the "cascade utilization + material regeneration" industry chain is not yet mature, and the purity of secondary copper limits high-end applications.

In 2,025, the tariff policies of major global countries on China's NEVs exhibit characteristics of "rising protectionism + regional differentiation". Core economies restrict the entry of Chinese products through tariff barriers, countervailing duties, carbon tariffs, and other tools, while guiding industry chain transfer through localization production requirements.

Southeast Asia: Tariff differentiation and industry chain siphoning: Indonesia's two-way strategy as a resource country; Thailand's tariff haven as a manufacturing hub; Vietnam's policy fluctuations and geopolitical balancing.

►Implementation Plan for High-Quality Development of the Copper Industry (2025-2,027) - Policy support, resource security, technological innovation, green transformation, industry chain coordination, and market expansion.

Capacity-driven: The Implementation Plan proposes to "vigorously promote a new round of strategic actions for breakthroughs in mineral exploration", focusing on building copper ore resource bases in regions such as Tibet, Xinjiang, and Yunnan. It is expected that domestic copper ore resources will increase by 5%-10% by 2,027. For example, the Phase II expansion project of the Yulong Copper Mine in Tibet will add 5 million mt of copper metal reserves and increase annual production capacity to 200,000 mt.

Tax refund support: Implement a 30% immediate tax refund after payment of VAT for secondary copper enterprises, and favorable corporate income tax, among other preferential measures, to drive the proportion of secondary copper production from 25% in 2024 to 28% in 2027.

NEVs: "Notice Promoting the Trade-in Policy for Automobiles in 2025", the Ministry of Transport's "Detailed Implementation Rules for Subsidies for the Update of New Energy City Buses and Power Batteries in 2025", MIIT's "Key Points for the Development of the NEV Industry in 2025", and MIIT's "Guiding Opinions on Accelerating the Construction of Charging Infrastructure", among others.

►Main Coping Strategies of Enterprises

Diversified supply system of "minerals + recycling + overseas": Upstream resource layout: Global exploration of mineral resources; Supply chain optimization: Long-term contract locking, regional resource construction;

Focus on high value-added products and low-carbon transformation: Product structure optimization: High-end copper semis, lightweight applications, etc.; Application of low-carbon technologies: Green electricity substitution + carbon footprint certification;

Combination of policy hedging and financial instruments: Response to trade policies: Tariff avoidance, compliance reviews; Application of financial instruments: Hedging, price insurance;

Dual-wheel drive of emerging fields and regional markets: Exploration of emerging demands: AI data centers, hydrogen energy, and ESS; Globalization layout: exploring regional markets.