Copper, with its superior conductivity, thermal conductivity and corrosion resistance, plays an important role in many fields. In China, copper is widely used in many fields. Among them, electricity demand accounts for about 50% of total demand, is well-deserved leader in demand, followed by home appliances manufacturing, construction and so on. This pattern is likely to change with the announcement of the National Carbon Policy.

As early as June 2015, China submitted to the Secretariat of the convention the document “Strengthening action on climate change -- China’s national independent contribution”, the Independent action targets for 2030 have been set: carbon dioxide emissions will peak around 2030 and strive to reach their peak as soon as possible; and carbon dioxide emissions per unit of GDP will be reduced by 60 to 65 per cent from 2005 levels, non Fossil fuels account for about 20 percent of primary energy consumption, and forest reserves are about 4.5 billion cubic meters higher than in 2005. In September 2020, General Secretary Xi Jinping announced at the general debate of the seventy-five UN General Assembly that China will increase its contribution to national ownership, adopt more effective policies and measures, and strive for a peak in carbon dioxide emissions by 2030, towards Carbon Neutrality by 2060. Under this background, the demand for copper in power system will change greatly. At present, China’s thermal power generation mainly accounts for about 70% of the total power generation. However, thermal power generation has the following main problems. First, coal-fired power generation is more polluting. As coal is the main fuel for thermal power generation, coal combustion will produce a large amount of carbon dioxide, which is serious pollution to the environment and not in line with the national double-carbon policy. Second, China’s coal supply has more than 30% dependence on imports, which makes China’s power generation enterprises face the risk of imported coal price fluctuations. As a result, new types of green power generation, mainly wind and photovoltaics, are on the rise.

From the point of view of the amount of investment completed in power capital construction, the total amount completed from January to July this year was 222.7 billion yuan, of which wind power was 99.2 billion yuan, accounting for about 45% of the total amount completed. Photovoltaics is now the smallest, but it’s growing fast. Wind power uses a lot more copper than conventional thermal power because wind power plants have lots of copper parts that are not needed in conventional thermal power plants. Wind power can be divided into two main types: Onshore and offshore. The common part of the two types is the main generator body. The copper part includes the Rotor House, converter, main shaft, etc. . Since 2018, wind turbine production has grown at an annual rate of about 11 percent. With the implementation of the National Environmental Protection Policy and other related policies, in the next five years, the growth rate will reach 13% , is expected to become a new growth point in copper demand. On the other hand, the demand for copper in new energy vehicles is increasing. The average fuel car uses about 20KG of copper, 60KG of plug-in hybrid cars and 80KG of pure electric cars. As a result of related policies, the production and sales of new energy vehicles are now growing at a 100% annual rate every month, leading to a significant increase in the demand for battery grade copper foil and automotive copper wire. Demand for copper will also be boosted by the spread of new energy charging piles. The new energy sector is expected to use up to 100,000 tonnes of copper this year, accounting for 1 per cent of total copper consumption.

With the support of National Double Carbon Policy, high pollution and high energy consumption industries will move from front to back, while new materials and new energy fields will come to the fore and become the focus of attention. The rise of wind power and new energy will gradually replace thermal power generation and fuel vehicles over the next 30 years, respectively, and copper demand will tilt toward these two new growth points.

Source: Tongxinbao