View Downstream Copper Demand Trends In Processing Material Production | Investment Research Report
China's copper treatment material production increased by 1.9% year-on-year in 2024
At the end of February, the China Non-Metal Processing Industry Association announced the copper processing material output in 2024. Copper production corresponds to the main demand for copper. As one of the few official data, we can explore demand trends for different types of copper materials. In 2024, China's copper processing materials output was 21.25 million tons, a year-on-year increase of 1.9%. Among them, the increase and growth rate of copper foil and copper tube is relatively high, which corresponds to the high demand growth rate of lithium battery copper foil and air-conditioning copper tube.
Looking back at the output data of various processed materials in the copper industry from 2020 to 2024, the increase was mainly driven by copper wire, copper foil, copper tape and copper tubes, of which 33% of the wire accounted for 33% of the increase, aluminum foil contributed 25% and peel rate contributed 20%. In terms of growth rates, the average annual compound growth rate of copper material production from 2020 to 2024 is 3%, with copper foil having a CAGR of 22%, far exceeding other categories. The CAGR growth rates of copper tape and copper tube are 5% and 4% cnc factories, respectively, which also exceeds the industry average growth rate.
Copper foil
It can be seen that the output of copper foil can be seen that in recent years, the production of copper foil mainly depends on the copper foil of lithium battery. In 2024, the domestic production of copper foil for lithium batteries increased by 143%, compared with 2021. However, during the same period, China's battery production growth rate was 257%. The growth rate of lithium battery copper foil production is significantly lower than that of battery production, mainly because lithium battery copper foil is getting thinner, from the mainstream 8 microns in 2020 to now below 6 microns. Secondly, the development of composite copper foil has reduced the use of copper.
Copper belt
Ten years ago, in 2014, brass tapes accounted for 58% of copper tape production and 28% of copper tapes. Since 2022, copper belt production has exceeded brass belts and accounts for 45% of the total by 2024. Copper tapes are close to pure copper, have good electrical conductivity and thermal conductivity, and are mainly used in power, electronics, communications and other industries. Brass tape is a copper-zinc alloy with good mechanical properties and corrosion resistance, mainly used in hardware CNC machining company, building materials, machinery manufacturing and other fields. In the past few years, the increase in copper end demand has been concentrated in areas such as electricity, new energy vehicles, and the demand for copper belts has increased significantly. The downstream of the brass belt is not just real estate construction, the demand is average. In recent years, many brass tape manufacturers have turned to copper tape.
Copper tube
Copper pipes are divided into copper pipes and alloy pipes. The production of copper pipes in 2024 will be 2.36 million tons, of which 2.24 million tons will be produced. The copper tube is divided into copper lamp tubes and copper internal threaded tubes. From 2020 to 2024, copper tube output increased by 310,000 tons, of which 237,000 tons of copper internal screw tubes and 68,000 tons of copper lamp tubes. In other words, the copper internal threaded pipe is the main force that pulls the copper pipe. The main reason is that the contact area of the internal threaded pipe is larger than that of the light pipe, the liquid in the pipe is turbulent and the heat exchange efficiency is higher. Coupled with the increase in energy consumption standards for air conditioners in recent years, it has promoted a high growth in demand for internal threaded pipes.
Summary and investment advice:
In short, the changes in copper production in recent years are consistent with changes in the terminal industry. The high prosperity of the power electronics, new energy vehicles and air conditioning industries has driven the growth of copper belts, copper foils and copper tubes. Production of brass products related to real estate building materials, such as copper rods and copper pipe strips, has stalled or decreased. Increased demand in emerging sectors has compensated for the decline in demand in the real estate and building materials sectors and enabled domestic copper production to grow at an average annual rate of 3% over the past four years. Looking ahead to 2025, investment in the power sector is expected to maintain a high growth rate, household appliances continue to benefit from “national subsidies,” growth rates for photovoltaic and new energy vehicles are likely to slow, and resistance in the real estate and building materials industries is expected to decrease. Overall, copper demand is elastic. With the low growth rate of copper supply, the copper supply and demand balance continues to remain tightly balanced, and the center of gravity of copper prices remains high. It is recommended to continue to focus on copper targets that benefit from copper prices: Zijin, Wumin, and China.
Risk Warning:
The global macroeconomic fluctuations lead to lower-than-expected risks of copper demand, and the risks of output growth of related mining companies do not meet expectations, safety and environmental protection risks. (Liu, Jiao, Securities)
Disclaimer: The content and data in this article are for reference only and do not constitute investment advice. Please verify before use. Be at your own risk based on this.