China’s copper juggernaut to slow after completion of major projects

By Al Mayadeen English
Source: Reuters
Today 08:54

China’s rapid copper demand growth is cooling as property and infrastructure cycles wane, amid eroding grid infrastructure in the West.

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Bundles of copper cables sit at a plant that produces parts for large electric vehicles in Mexico City, Mexico, on April 2, 2025 (AP)

China, long the prime mover of global copper demand, is losing momentum as a driver of consumption, prompting a reassessment of where future growth will come from and how producers and refiners should position themselves.

A Reuters analysis this month put China’s refined-copper usage at roughly 15 million tonnes this year but warned that growth is slowing as the country’s property sector and major infrastructure programs wind down. Industry observers estimate China’s share of global copper consumption could ease from about 57% in 2026 to near 52% by 2031, shifting at least some demand pressure toward other large markets such as the United States and India.

Why demand is cooling in China

Three factors underpin the slowdown. First, China’s prolonged property slump has reduced construction activity, a major end-use for copper in wiring, pipes, and fittings.

Second, a wave of infrastructure projects that previously underpinned high copper consumption is reaching completion.

Third, China has continued to expand domestic smelting and refining capacity, altering trade flows and reducing near-term import needs for refined metal.

These dynamics do not imply that China will cease to be the world’s dominant copper market; rather, they point to a moderation in the pace of growth after years of exceptionally rapid expansion. World refined production remained elevated in 2024, around 27.3 million tonnes according to industry tables, even as consumption patterns shifted.

Decaying grids to drive demand in the West

Experts expect copper exports to include copper wire used for power grid infrastructure, a sector that highlights the diverging trajectories between China and the West. In its last major network-infrastructure review a decade ago, the US Department of Energy found that 70% of American transmission lines were more than 25 years old, underscoring the scale of required upgrades across the United States and parts of Europe.

While China’s grid expansion has focused on building new, high-capacity networks to power industrial growth and renewable integration, Western economies face the more complex task of modernizing and replacing aging systems. Analysts note that this process will be slow, costly, and less copper-intensive than China’s earlier phase of large-scale construction, though it will still support steady long-term demand.

Robert Edwards, principal analyst at metals consultancy CRU, said China’s dominance in copper markets had been expected to ease years ago, yet persistent investment in electric vehicles, renewable energy, and grid infrastructure kept the country at the center of global demand.

Who produces and supplies copper today?

China remains the largest producer and consumer of refined copper, followed by nations with significant smelting and refining industry capacity, such as Japan and Chile. National production and refinery data from the International Copper Study Group and national statistics outline this concentration of refining capacity.

The manufacturing powerhouse leads consumption at roughly 15 million tonnes annually. The European Union, plus the UK, consumes in the order of 3 million tonnes, while the United States consumes roughly 1.5–1.8 million tonnes per year. Forecasts point to stronger relative growth in the US and India as they invest in grid upgrades, electric vehicle (EV) deployment, and renewable energy infrastructure.

However, ore supply continues to be dominated by large Andean mines. The Escondida mine in Chile, the world’s largest single copper mine, is operated by major mining groups and is commonly cited as the single largest source of copper concentrate. Collahuasi, in Chile, is another top producer; it is run as a joint venture that industry reporting attributes primarily to global miners and trading houses.

Shifting trade and consumption patterns

Refined copper remains indispensable across modern industries, serving as a cornerstone of electrical wiring, power transmission and distribution networks, motors, transformers, and construction materials. Its applications are expanding rapidly in electric vehicles, renewable-energy systems, and industrial electrification, all of which sustain long-term structural demand tied to the global energy transition.

Yet, analysts warn that China’s slowing demand growth could send ripples through global markets, exposing exporters to new economic headwinds and disrupting established trade flows.

Panmure Liberum analyst Tom Price told Reuters that “China will reduce its rate of copper consumption and stockpiling.”

“We are going back to old-fashioned drivers of copper, which is basically replacement cycles outside China,” he said, adding that China’s infrastructure buildout, including its power distribution grid, “will drift to a lower level to match (its) requirement.”

Price forecasts that China’s copper demand will be 6% lower in 2031 than in 2026, with its share of global primary copper consumption slipping from 57% to 52%, equivalent to about 27 million tonnes. Meanwhile, he expects US demand to reach 2.2 million tonnes by 2031, a nearly 50% increase from 2026 levels, while India’s consumption is projected to exceed 1 million tonnes, up more than 30%.

US tariffs may impact Chinese slowdown

Trade and industry dynamics are also being reshaped by US President Donald Trump’s recent decision to impose 50% tariffs on copper pipes and wiring, a move aimed at boosting domestic manufacturing.

According to Trade Data Monitor, the United States was China’s fourth-largest market for copper pipes, importing 14.4 million tonnes last year and about 8 million tonnes in the first seven months of 2025. The tariffs could therefore curtail one of Beijing’s key industrial export channels. However, whether this shift leads to a lasting slowdown depends on how quickly US manufacturers can scale production to offset the shortfall, and whether Washington maintains its protectionist course long enough to foster a self-sufficient copper supply chain.