MNI: China Copper Demand Set To Ease Over H2

China’s copper demand is expected to ease to 5-8% growth in H2, down from the double-digit pace noted earlier this year, as short-term policy drivers fade and structural economic factors take a greater role, analysts told MNI.

Xu Hongping, head of research at Chuang Yuan Futures, said H1 consumption rose 10-12% y/y, boosted by one-off factors such as provinces’ rush to connect renewables to the grid before subsidy and policy deadlines. While growth is set to slow, electric vehicle production – supported by industrial upgrading policies – will remain a key driver, alongside emerging demand from advanced manufacturing sectors such as AI infrastructure and semiconductors, Xu said. Power infrastructure, particularly State Grid investment and hydro projects, will also provide the backbone of demand, accounting for more than half of China’s copper use, she added.

Incremental demand from household appliances is forecast to ease to 3-5% in H2, down from around 8% in H1 as the “old-for-new” programme weakens, said Gu Fengda, chief analyst at Guosen Futures. Including exports, overall demand growth should moderate to 7-9% in H2, from 11-12% in the first half, he predicted. The sharp 23% y/y fall in real-estate starts this year and the U.S. decision to impose a 50% tariff on semi-finished copper products from August will present additional headwinds, Gu added.

While both analysts agree copper demand will ease, they now see overall 2025 consumption slightly stronger than in June when they expected only 4-5% growth. (See: MNI: China Copper Demand To Accelerate In 2025) Demand had exceeded earlier expectations after the government introduced major infrastructure initiatives, expanded smart grid projects and accelerated AI computing, and data centre development, Gu said. 

INDUSTRIAL SHIFT

Beijing’s “anti-involution” agenda – aimed at eliminating inefficient refining capacity and raising smelting concentration above 50% – is accelerating the shift toward higher-value-added copper products such as electromagnetic wire and special strip, Gu said. “This indirectly lifts copper intensity per unit of output and could offset downside risks to demand,” he noted.

Concerns over mandatory cuts in EV and solar capacity appear exaggerated, Gu added, arguing current measures are industry self-regulation rather than enforced administrative curbs. (See MNI INTERVIEW: Limited PPI Impact From China's)

“Deliberate scaling back of low-margin EV and solar capacity may temporarily temper copper demand in these areas, but aligns with industrial upgrading toward higher-value applications where copper remains indispensable,” Xu said.

PRICES

September’s traditional peak season, combined with low inventories, should keep Shanghai copper futures within the CNY78,000-83,000/tonne range, with multiple upward pushes likely in Q4, Gu said. A breakout above CNY83,000 is possible if spot treatment charges (TCs) drop further, deepening smelters’ losses, alongside rising resource nationalisation risk among major producers, such as Indonesia and the Democratic Republic of Congo, he added.

Xu expects current levels of CNY78,000-80,000/tonne to persist in the near term, but sees the risk balance tilting toward gradual gains. Downside risks include a sharper-than-expected global manufacturing slowdown or rising trade barriers, though firm demand from the green transition should cushion any pullback. Conversely, a major stimulus package or faster global monetary easing could spark a breakout, she concluded.