China’s Secret Copper Obsession: Why the World’s Top Consumer is Hoarding More Than Ever

China’s copper consumption is rapidly increasing, driven by the government’s focus on energy transition.

According to a report on non-ferrous metals released yesterday, China’s copper consumption in 2022 rose by 4.6% from the previous year, reaching 15.52 million tons. China accounts for more than half of the world’s copper consumption.

In 2022, China used the most copper in its power grid sector, which accounted for 37% of the total consumption. This was followed by household appliances at 18%, construction at 17%, industrial machinery at 12%, and transportation (including electric vehicles) at 9%.

Copper is mainly used in the power grid in power plants, high-voltage switches, and transmission and distribution lines. It is also needed for components of household appliances, such as air conditioners and refrigerators, that conduct heat and electricity.

More recently, as China has intensified its efforts to transition to cleaner energy and reduce carbon emissions, demand for copper in the electric vehicle (EV) and renewable energy sectors has surged. EVs use copper extensively in wiring, battery packs, and motors, requiring about four times more copper than conventional gasoline-powered cars.

Over the next three years, from 2024 to 2026, China’s copper demand is expected to grow by an average of 3% per year, reaching an estimated 16.83 million tons by 2026.

Although China consumes over half of the world’s copper, it produces less than 10% of the global supply. China’s copper production peaked at 1.94 million tons in 2022 but dropped by 12% to 1.7 million tons in 2023.

Last year, global copper mine production hit 22 million tons. China produced 1.7 million tons, making up 8% of the world’s total. The top five copper-producing countries were Chile (23%), Peru (12%), the Democratic Republic of Congo (11%), China (8%), and the U.S. (5%). Combined, these countries were responsible for 59% of global copper production.

An industry insider commented, “Copper is a strategic mineral resource designated by the Chinese government, strengthening the supply chain’s development, protection, and management. As copper demand rises, Chinese companies actively secure domestic and international mines to boost their production capacity.”