An article on the ABC today by Michael Janda suggests house prices in China are continuing to decrease, that recent attempts by the Chinese government are failing to make any impact on this. The graph below tells the story. Perhaps drawing an imaginative conclusion it seems like successive negative price dips have been getting bigger since 2012 - engineers might see that the signal hunting has amplified since then.

https://www.abc.net.au/news/2025-01-07/china-property-crash-a-warning-for-australian-housing-market/104788660

In 2024 the US increased tariffs on EV cars from China from 25% to 100% mid year in an act of protectionism it appears rather than to combat subsidies. The EU applied tariffs between 17% and 36% to mitigate subsidies they calculated were being provided to Chinese manufacturers. Interestingly the EU also applied tariff's to Tesla imports, to the tune of 7.8%. Brazil the biggest LATAM market is removing an EV import tariff advantage, ramping up tariffs from zero to 35% by 2026, matching the 35% tariff currently applied on ICE vehicles. I'm not sure what the signing of the very recent Mercosur/EU trade agreement does to this arrangement. Chinese exports are growing for their EV but at a slower than forecast pace, whilst the domestic market is booming.

https://www.euronews.com/business/2024/10/30/european-tariffs-on-chinese-electric-vehicles-all-you-need-to-know

China is investing around $800Bn USD equivalent in modernising and expanding its electricity grid network, with 85% of that money going into distribution - poles and wires.

https://www.ft.com/content/2c0fa0d1-2902-440e-8677-d9f087c2e943

In summary, copper consumption by the worlds biggest consumer is up for electricity grid development, growing but slower for EV manufacture and shrinking for the construction sectors.

Given the projected possible tariff wars on 2025 none of these sectors may be affected except by domestic considerations and decisions perhaps.

I would welcome your thoughts dear brains trust.

Disclosure - 29M and Sandfire in SM, 29M and Hudbay Minerals in RL

Interesting to see what is occurring at the smelter level of the supply chain in China. China is the worlds largest importer/consumer of copper, accounting for around 60% or so.

A large group of copper smelters in China, who import ore and extract/concentrate the copper, have agreed a 68% drop in concentrate processing costs per tonne for 2025, over last year. At face value (the article suggests this) you might think this indicates a competitive oversupply of ore. However, smelting capacity in China has grown enormously over the last 2 or 3 years, whilst the supply side hasn't changed much. Juaing, a Chinese smelter company, has/is adding 600,000 tonnes capacity for 2025 in two new plants.

https://www.spglobal.com/commodity-insights/en/news-research/latest-news/metals/122624-chinas-top-smelters-cut-q1-floor-price-for-copper-amid-supply-strain

Adding to this the Chinese government is reducing tariffs on high quality recycled copper imports saying they are encouraging improved low carbon outcomes.

https://www.reuters.com/world/china/china-cut-import-tariffs-some-recycled-copper-aluminium-raw-materials-2024-12-28/

Essentially it looks like a clearing out of older dirtier processors with higher costs from the industry, concentrating processing through a smaller group of larger Chinese companies. The Chinese are at least forward looking.

India is also building up its smelting capacity - China may have a decent competitor reasonably soon.

Panama is negotiating the reopening of Cobre Panama copper mine, which was closed by the previous government over environmental operating issues. New government needs the income and can reset the relationship. Prices for processing imports by Chinese concentrators are low, reflecting overcapacity in the concentrating phase and not higher than needed imports. China accounts for around 60% of global consumption but economic incentives required to restart construction have not led to meaningful construction activity changes in China. So, Cobra Panama restarting will add around 300ktpa to supply. And whilst China remains slow the price for copper will remain as is or maybe a bit higher in the range $8500 to $9500 per tonne - not enough to spark a rush to the sector. Global growth is predicted around 2.9%, currently 28.6Mt or so per annum, around historical averages, out to 2028 (unless China fires off).

Mining.com reported on a BHP assessment of historical discoveries of new copper. BHP suggests new finds are smaller, less frequent and deeper, meaning higher costs and more complex operations.

https://www.mining.com/web/charted-major-copper-discoveries-since-1900/