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Released September 23, 2024 | NEW DELHI
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Researched by Industrial Info Resources (Sugar Land, Texas)--Copper smelting is a crucial process in the global supply chain, as it transforms raw copper ore into usable metal, and is essential for industries like electronics, construction and energy. As the world continues to advance toward a net-zero emissions future, copper remains an indispensable metal for worldwide electrification, especially in green technologies such as solar panels, wind turbines and electric cars. However, the copper smelter market is under pressure due to supply shortages, low refining charges and rising demand from several industries.
Already facing the pressure of unprecedented demand, the supply side is grappling with several challenges, majorly driven by the Cobre Panama mine closure in December 2023. This has led to a shortage of copper concentrate--the raw material crucial for copper production, putting pressure on smelters--especially Chinese smelters--to cut down production.
Owing to this shortage, Chinese smelters have been struggling to ramp up copper production, and therefore, have caused significant global repercussions. The treatment and refining charges (TC/RCs) have plummeted significantly, making smelting less profitable. According to Fastmarkets, the TC index declined from $89.20 per tonne in August 2023 to just $4.10 per tonne in May 2024. The TC index recovered slightly to US$4.3 per metric ton in July, plummeting further to 70 cents per metric ton in September 2024, according to S&P Global Insights.
Chinese smelters are having to pay higher prices for raw copper concentrate, while selling refined products at reduced prices. Several Chinese smelters, such as Daye Nonferrous Metals and Baotou Huading, are even considering production cuts--with Baotou Huading planning to reduce output by as much as 40% by next year to further balance supply constraints.
Additionally, planned maintenance shutdowns of many Chinese as well as major global smelters this year have further exacerbated the raw material shortage and caused supply disruptions. According to Earth-i's SAVANT real-time Global Copper Monitoring Index, approximately 16% of global copper-smelting capacity was inactive in the first half of 2024, a noticeable rise from inactivity levels of 13% in the previous year.
Many copper smelters are still closed while some have opened. China's Chifeng Jintong facility resumed in July after a one-month shutdown. The Fubang plant has also restarted following a three-month closure. Meanwhile, Baotou, Wuxin, and Kunming facilities remain inactive.
In Germany, Aurubis's (Hamburg) Hamburg smelter has resumed operations following scheduled maintenance, but other smelting facilities in Samsun (Turkey), Tsumeb (Namibia) and Isabel Leyte (Philippines) remain inactive.
However, the copper-smelting sector continues to attract investments amid supply disruptions and operational challenges. Industrial Info is tracking 197 projects globally worth US$26.52 billion geared at developing and expanding copper smelters. Of this total spending, 41% is attributed to grassroot projects, 31% aimed at plant expansions and 20% at unit addition projects. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for a full list of projects.
By region, Asia leads the way with investments accounting for around 70% of the global market share. South America follows with US$4.56 billion. North America and Europe are also driving spending worth US$1.6 billion and US$1.22 billion, respectively.
With investments worth US$18 billion, Asia is investing in more than 100 projects. The majority of the investments are concentrated in China, which accounts for around 72% of the spending in the Asia region. Guangxi Nandan Nanfang Metals Company Limited is investing around US$767 million for Nanning Chongzuo Primary Copper Smelter Phase III Expansion, which entails constructing a new primary copper smelter with a capacity of 300,000 tons per year, to expand copper capacity from 550,000 tons per year up to 850,000 tons per year. Subscribers can click here to read the project report.
Chile, one of the major copper producers in South America, is also investing in new smelting projects to enhance its value chains. The nation is investing US$4 billion across 11 projects aimed at copper smelters. One of these projects is being led by Empresa Nacional de Mineria (Santiago, Chile), which is investing US$650 million to modernize an existing 340,000-ton-per-year copper refinery by replacing the existing Teniente Converter with a new Bottom Blowing Reactor plus a Continuous Converter in order to meet environmental mandates and produce copper concentrate and cathodes over a 50-year operational life in Paipotee (see project report.)
Indonesia is spending around US$1.52 billion across five projects. One of the projects is PT Medco Energi Internasional Tbk's US$500 million grassroot copper smelter and refinery complex, which would use 900,000 to 1 million tons per year of copper concentrates from the Batu Hijau copper mine and produce between 220,000 and 260,000 tons per year of LME grade A copper cathodes. Click here to read the project report.
About 60% of the projects are in the initial planning stage, 16% are undergoing engineering and 21% of the projects are under construction. With a relatively small percentage of the projects in the construction phase, the immediate supply of copper might remain tight, which would imply continuation of higher prices in the near term. However, with a large proportion of projects in the planning stage, the copper smelter market is primed for definitive growth once the supply-chain issues subside.
Subscribers to Industrial Info's GMI Project and Plant databases can click here for a full list of detailed reports for projects mentioned in this article, and click here for a full list of related plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
Already facing the pressure of unprecedented demand, the supply side is grappling with several challenges, majorly driven by the Cobre Panama mine closure in December 2023. This has led to a shortage of copper concentrate--the raw material crucial for copper production, putting pressure on smelters--especially Chinese smelters--to cut down production.
Owing to this shortage, Chinese smelters have been struggling to ramp up copper production, and therefore, have caused significant global repercussions. The treatment and refining charges (TC/RCs) have plummeted significantly, making smelting less profitable. According to Fastmarkets, the TC index declined from $89.20 per tonne in August 2023 to just $4.10 per tonne in May 2024. The TC index recovered slightly to US$4.3 per metric ton in July, plummeting further to 70 cents per metric ton in September 2024, according to S&P Global Insights.
Chinese smelters are having to pay higher prices for raw copper concentrate, while selling refined products at reduced prices. Several Chinese smelters, such as Daye Nonferrous Metals and Baotou Huading, are even considering production cuts--with Baotou Huading planning to reduce output by as much as 40% by next year to further balance supply constraints.
Additionally, planned maintenance shutdowns of many Chinese as well as major global smelters this year have further exacerbated the raw material shortage and caused supply disruptions. According to Earth-i's SAVANT real-time Global Copper Monitoring Index, approximately 16% of global copper-smelting capacity was inactive in the first half of 2024, a noticeable rise from inactivity levels of 13% in the previous year.
Many copper smelters are still closed while some have opened. China's Chifeng Jintong facility resumed in July after a one-month shutdown. The Fubang plant has also restarted following a three-month closure. Meanwhile, Baotou, Wuxin, and Kunming facilities remain inactive.
In Germany, Aurubis's (Hamburg) Hamburg smelter has resumed operations following scheduled maintenance, but other smelting facilities in Samsun (Turkey), Tsumeb (Namibia) and Isabel Leyte (Philippines) remain inactive.
However, the copper-smelting sector continues to attract investments amid supply disruptions and operational challenges. Industrial Info is tracking 197 projects globally worth US$26.52 billion geared at developing and expanding copper smelters. Of this total spending, 41% is attributed to grassroot projects, 31% aimed at plant expansions and 20% at unit addition projects. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for a full list of projects.
By region, Asia leads the way with investments accounting for around 70% of the global market share. South America follows with US$4.56 billion. North America and Europe are also driving spending worth US$1.6 billion and US$1.22 billion, respectively.
With investments worth US$18 billion, Asia is investing in more than 100 projects. The majority of the investments are concentrated in China, which accounts for around 72% of the spending in the Asia region. Guangxi Nandan Nanfang Metals Company Limited is investing around US$767 million for Nanning Chongzuo Primary Copper Smelter Phase III Expansion, which entails constructing a new primary copper smelter with a capacity of 300,000 tons per year, to expand copper capacity from 550,000 tons per year up to 850,000 tons per year. Subscribers can click here to read the project report.
Chile, one of the major copper producers in South America, is also investing in new smelting projects to enhance its value chains. The nation is investing US$4 billion across 11 projects aimed at copper smelters. One of these projects is being led by Empresa Nacional de Mineria (Santiago, Chile), which is investing US$650 million to modernize an existing 340,000-ton-per-year copper refinery by replacing the existing Teniente Converter with a new Bottom Blowing Reactor plus a Continuous Converter in order to meet environmental mandates and produce copper concentrate and cathodes over a 50-year operational life in Paipotee (see project report.)
Indonesia is spending around US$1.52 billion across five projects. One of the projects is PT Medco Energi Internasional Tbk's US$500 million grassroot copper smelter and refinery complex, which would use 900,000 to 1 million tons per year of copper concentrates from the Batu Hijau copper mine and produce between 220,000 and 260,000 tons per year of LME grade A copper cathodes. Click here to read the project report.
About 60% of the projects are in the initial planning stage, 16% are undergoing engineering and 21% of the projects are under construction. With a relatively small percentage of the projects in the construction phase, the immediate supply of copper might remain tight, which would imply continuation of higher prices in the near term. However, with a large proportion of projects in the planning stage, the copper smelter market is primed for definitive growth once the supply-chain issues subside.
Subscribers to Industrial Info's GMI Project and Plant databases can click here for a full list of detailed reports for projects mentioned in this article, and click here for a full list of related plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
