According to data released today by the International Copper Association (ICA), projections based on China’s 13th Five-Year Plan (FYP) show the potential for 15% growth in the Chinese copper market. ICA, the leading authority on copper end-use, commissioned the study (which was conducted by All China Marketing Research) to analyze potential demand in China under the country’s most recent FYP.
ICA’s study examined five key markets that represent more than 50% of the total copper market in China: building construction, power infrastructure, transportation, home appliances and manufacturing. A snapshot of the overall findings can be found in the chart.
“China has set forth several ambitious goals over the next five years and, as a result, we see wide-ranging opportunities for growth moving forward,” said Richard Xu, Asian regional director, ICA. “Under the 13th Five-Year Plan, China is expected to see at least 6.5% growth in GDP annually and double the personal income of its citizens by the end of 2020. To do so, the government will have to invest great resources in areas such as transportation, building infrastructure and energy. All of these sectors provide strong opportunities for the use of copper.”
Power infrastructure is seen as a significant area for growth with an expected investment in both the power grid and power generation. The projected growth of copper demand in the two sectors is 82% for power generation and 40% in the power grid. As a result of the expected enhancement to this infrastructure, it translates to an estimated aggregate growth in copper demand of 1.78 Mt.
The renewable energy market represents a much larger portion of the new FYP compared to the historical average. Out of the expected new power generation installations, wind and solar will account for more than 40% of the new capacity vs. 13% in pre-2015. This is important to growth because on average, these renewable energy systems – solar, wind, hydro – require four to 12 times more copper per kilowatt than traditional power generation.
A deeper look into the findings show the Chinese government’s aspirations during this FYP are particularly favourable to driving the use of copper in the transportation sector. Substantial growth opportunities are likely to occur based on a greater adoption of electric vehicles. It is expected that the number of electric vehicles is expected to grow more than 800%. This projection is significant for copper demand because a full-electric vehicle uses three to four times as much copper as its gas powered counterpart. As a result of this trend toward alternative fuels, the total number of electric vehicle charging stations and piles are projected to increase by nearly 500% and 1,800%, respectively.
