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# Source: Wall Street Insights  

By Zhang Yaqi  

Duan Shaofu, Deputy Secretary-General of the China Nonferrous Metals Industry Association, stated that to improve the construction of the copper resource reserve system, in addition to expanding the scale of national strategic copper reserves, research could also be conducted to include copper concentrates—with large trading volume and high liquidity—in the reserve scope. Analysts believe this is consistent with the *Implementation Plan for the High-Quality Development of the Copper Industry*, helping to control smelting capacity, enhance the industrial chain's pricing power and resource guarantee capabilities, and ensure stable growth and transformation and upgrading of the nonferrous metals industry.  

China may be exploring the inclusion of copper concentrates, an upstream raw material, into the national strategic reserve system.  

According to a report by Shanghai Securities News, at a press conference on February 3, Duan Shaofu noted that in addition to reserving refined copper, consideration could be given to adding copper concentrates (characterized by large trading volume and easy monetization) to the reserve pool. Meanwhile, efforts will be made to expand the scale of national strategic copper reserves and explore a commercial reserve mechanism, selecting key state-owned enterprises to pilot commercial reserves through measures such as fiscal interest subsidies.  

This statement sends a clear policy signal. According to China Lianhe Credit Rating Co., Ltd., copper is a strategic resource related to national economy, people's livelihood, and national economic development. As the world's largest consumer and producer of refined copper, China has relatively scarce copper ore resources. Copper concentrate treatment charges (TC) have been declining since the third quarter of 2023, and long-term contract processing fees for 2025 remain at historically low levels, putting continuous production cut pressure on domestic high-cost smelters.  

Analysts argue that including copper concentrates in reserves will help China strengthen its voice in the upstream of the copper industrial chain, ease raw material pressure on smelting enterprises, and enhance supply chain resilience and security. This policy innovation complements the *Implementation Plan for the High-Quality Development of the Copper Industry (2025—2027)* jointly issued by 11 ministries and commissions earlier, collectively promoting the transformation of the copper industry from capacity expansion to quality and efficiency improvement.  

## Accelerated Construction of the Reserve System?  

Duan Shaofu clarified two key paths for improving the copper resource reserve system at the press conference: first, expanding the scale of national strategic copper reserves; second, exploring a commercial reserve mechanism, with key state-owned enterprises selected to pilot commercial reserves via fiscal interest subsidies and other measures.  

Data released by the association shows that China's nonferrous metals industry maintained strong growth momentum in 2025. According to CCTV Finance, the industrial added value of nonferrous metals enterprises increased by 6.9% in 2025, 1.0 percentage point higher than the national average growth rate of industrial added value of designated-size enterprises. The output of ten major nonferrous metals exceeded 80 million tons for the first time, reaching 81.75 million tons, a year-on-year increase of 3.9%, with an average annual growth rate of 5.0% during the 14th Five-Year Plan period.  

The association predicts that the nonferrous metals industry will maintain steady growth in 2026, with the first quarter continuing the sound momentum at the end of last year to achieve a good start for the 15th Five-Year Plan. Assuming no "black swan" events occur, the preliminary forecasts for major indicators of the nonferrous metals industry in 2026 are as follows:  

- **Production**: Will remain stable, with the industrial added value of the nonferrous metals industry expected to increase by about 5% year-on-year. Based on the production characteristics and capacity construction of nonferrous metals, the output of ten major commonly used nonferrous metals is projected to grow by about 2% year-on-year in 2026.  

- **Prices**: Prices of industrial silicon and lithium carbonate are expected to stabilize and recover in 2026, while prices of major commonly used nonferrous metals such as copper and aluminum will fluctuate at high levels. The industry's operating income is expected to increase by 5%, with a slight growth in profits.  

## Continuous Intensification of Policy Support  

The research on copper concentrate reserves is not an isolated measure but a continuation of a series of industrial policies. Tao Qing, Spokesperson of the Ministry of Industry and Information Technology (MIIT) and Director of the Operation Monitoring and Coordination Bureau, stated at a press conference held by the State Council Information Office on July 18, 2025, that the next step will be to continuously implement the implementation plans for the high-quality development of the copper, aluminum, and gold industries, and issue and implement a new round of work plans for stabilizing growth in the nonferrous metals industry.  

Policy focus lies on both stabilizing growth and promoting transformation:  

- **Stabilizing growth**: Emphasizing coordinated efforts on both supply and demand sides, strengthening guarantees through efficient resource utilization, optimizing supply by upgrading refined processing materials, and expanding demand by promoting the upgrading of bulk consumption and cultivating emerging consumer markets.  

- **Promoting transformation**: Encouraging innovation in new nonferrous metal materials and green low-carbon technologies, and building a number of green mines, green factories, and green industrial parks.  

According to China Lianhe Credit Rating Co., Ltd., the *Implementation Plan for the High-Quality Development of the Copper Industry (2025—2027)* jointly issued by 11 ministries and commissions including MIIT clarifies:  

- For mining and beneficiation enterprises: The plan will promote copper mining and beneficiation enterprises to develop in the direction of stronger resource guarantees and higher technological innovation capabilities, helping to improve enterprises' resource self-sufficiency rate, enhance their voice in the industrial chain, and lay a solid foundation for sustainable development.  

- For smelting enterprises: The plan is equivalent to strictly controlling new domestic copper smelting capacity, helping to promote the return of copper concentrate treatment charges (TC) to a reasonable level, improve the profitability and cash flow of smelting enterprises, reduce corporate credit risks, and benefit the long-term healthy development of the industry.  

The plan proposes that by 2027, the resilience and security level of the copper supply chain will be significantly improved, the capacity to guarantee copper raw materials will be continuously enhanced, the domestic copper ore resource volume will strive to increase by 5% to 10%, and the recycling level of secondary copper will be further improved. In terms of prices, the association predicts that prices of major commonly used nonferrous metals such as copper and aluminum will fluctuate at high levels in 2026, with the industry's operating income expected to increase by 5% and profits to grow slightly. The plan also proposes cultivating globally leading large copper enterprise groups, increasing the concentration of copper mining, beneficiation, and smelting links, and supporting leading enterprises to play a leading role in industrial cluster construction and transformation and upgrading.  

## Pressure and Opportunities for Leading Enterprises  

Copper prices have surged sharply over the past year or so. In 2025, copper prices soared by more than 40%, hitting a record high. The upward trend has continued into 2026, with a cumulative increase of about 8% so far this year.  

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