China imported 2.4 million metric tonnes of copper concentrate in May 2025, an 18% decline from April’s all-time high, according to customs data. Despite the sharp month-on-month drop, imports were up 5.8% compared to May 2024 and year-to-date volumes reached 12.4 million tonnes, a 7.4% increase over the same period last year. The data underscores China’s sustained appetite for copper concentrate to feed its rapidly expanding smelting sector, even as global supply tightens and treatment and refining charges (TC/RCs) remain deeply negative.
Smelters Maintain Output as By-Product Prices Offset Squeezed Margins
The steep decline in May’s copper concentrate imports comes after a record-setting April, when Chinese smelters accelerated purchases to build inventories ahead of new capacity launches. Analysts note the drop was expected following the April surge, but the scale of the decrease surprised some market participants given that smelter output has not slowed. Robust domestic demand and the need to capitalize on high prices for by-products such as sulphuric acid and gold have helped smelters maintain operations despite a challenging profitability environment.
TC/RCs, which measure the fees miners pay smelters to process ore, have fallen to historic lows—recent benchmark settlements dropped over 70% year-on-year to $21.25 per tonne. This squeeze on margins would typically force some capacity offline, but elevated by-product revenues have cushioned the impact, allowing Chinese smelters to keep utilization rates high. Industry sources report that many smelters are also blending lower-grade concentrates and increasing the use of secondary copper material to offset tightness in global mine supply.
Shifting Trade Flows and U.S. Tariff Impact
While China’s copper concentrate imports remain strong, imports of unwrought copper and copper products fell sharply in May—down 16.9% year-on-year and 2.5% month-on-month to 427,000 tonnes. Year-to-date, these imports are down 6.7% at 2.17 million tonnes. The contraction is partly due to global copper flows being redirected to the United States, where traders rushed to deliver metal ahead of new tariffs announced by the U.S. administration. President Trump’s decision to double tariffs on aluminum and steel to 50% starting June 4 has further accelerated this trend.
The shift in trade flows is reflected in exchange inventories. COMEX copper stocks in the U.S. have nearly doubled since late March, reaching their highest level since 2018, while Shanghai Futures Exchange (SHFE) copper inventories rebounded moderately in May but remain down 60% from their February peak. The Yangshan copper premium—a key indicator of Chinese import demand—has climbed to its highest level since December 2023, underscoring ongoing tightness in the domestic market.
Copper Market Overview
Copper is a cornerstone of the global energy transition, essential for electrification, renewable energy infrastructure, and electric vehicles. In 2025, copper prices have remained volatile, with the LME three-month contract averaging over $10,200 per tonne in May. Global mine supply remains tight due to disruptions in key producing countries, while demand from China’s manufacturing and construction sectors stays robust. The persistent supply-demand imbalance is expected to keep the market tight, with Chinese smelters likely to remain aggressive buyers of concentrate and scrap even as trade tensions and tariff shifts reshape global flows.
Company Background and Market Context
China’s copper smelting industry is dominated by state-owned enterprises such as Jiangxi Copper and Tongling Nonferrous Metals, as well as private giants like Zijin Mining. The sector has undergone rapid expansion, with smelting capacity rising by 25% since 2021 and another 10% growth projected for 2025. This aggressive build-out has outpaced global mine supply, creating a persistent mismatch that has driven down TC/RCs and increased reliance on imported concentrates.
Chinese smelters have responded by investing in blending facilities at bonded zones, sourcing more secondary copper, and seeking long-term supply contracts with major miners in Chile, Peru, and Africa. The government’s push for self-sufficiency in critical materials for the energy transition—including copper for power grids and electric vehicles—continues to underpin demand.
