China's copper supply will increase in 2022 despite the pressure of COVID-19, interest rate hikes, and tight power supply. According to Mysteel's survey, China's refined copper output in January-November is expected to be 9.697 million tonnes, with an increase of 4.1% year on year. Based on previous years' data, there is usually a concentrated increase in production in December. Therefore, China's refined copper output is expected to reach 10.622 million tonnes in 2022, with an increase of 4.1% year on year.
Data Source: Mysteel
There remains a significant increase in China's new production capacity for copper in 2022. As Mysteel's survey, the newly increased capacity of copper crude smelting and copper refining is 0.48 million tonnes and 1.14 million tonnes respectively, and their recovery production capacity both are 0.15 million tonnes. Of the newly increased refining capacity, 0.94 million tonnes use copper concentrate as the main raw material, and 0.20 million tonnes use blister copper or anode copper, which shows that the expansion of refining capacity is still dominated by mineral copper enterprises.
China's copper production capacity growth rate will decline significantly in 2023. On the one hand, there are policy constraints. On the other hand, as copper demand weakens, the rapid increase in capacity will lead to oversupply and hurt profits. According to Mysteel's survey, only 0.27 million tonnes of crude capacity and 0.30 million tonnes of refining capacity will be added in 2023, which will happen in March, July, and the fourth quarter respectively.
Data Source: Mysteel
An increase in capacity does not mean an increase in output simultaneously because refined copper output in China relays much on imported copper concentrate and changes accordingly. However, refined copper output in China is still expected to increase obviously in 2023 as the new refining capacity added in 2022 will be fully released in 2023.
0.27 million tonnes of new refining capacity were added in the second quarter of 2022 and 0.87 million tonnes in the fourth quarter. Once the capacity is fully released, combined with the 0.30 million tonnes of refining capacity released in 2023, China's refined copper output is expected to increase by 0.69-0.75 million tonnes or 6.8% in 2023. A newly increased in refining copper capacity means increased demand for blister copper or anode copper, so the supply of blister copper or anode copper is expected to remain tight in 2023.
Please refer to Mysteel's upcoming Copper Industry Chain Annual Report for more information.
Pre-Sale: 2022 non-ferrous metals annual report | Mysteel
Written by Edenlis Huang, huangting@mysteel.com
Edited by Paula Xu, xuzhongping@mysteel.com