China’s State Grid Corporation has announced an ambitious plan to invest RMB 4 trillion (approximately USD 574 billion) in power grid upgrades during the 14th Five-Year Plan period (2026–2030). Average annual investment is expected to reach RMB 800 billion, representing a 40% increase compared with the previous plan period. This landmark initiative focuses on three strategic pillars:
1. Ultra-High Voltage (UHV) Transmission Expansion
Around 30,000 kilometers of new UHV lines are planned, with estimated annual incremental copper demand of 300,000 tonnes, based on copper intensity of 40–60 tonnes per kilometer.
2. Smart Distribution Grid Upgrades
Accelerated modernization of urban and rural distribution networks will support the rollout of EV charging infrastructure, smart meters, and digital grid equipment. Charging infrastructure alone is expected to generate up to 500,000 tonnes of additional copper demand.
3. New Power System Development
Investment in off-grid microgrids and localized power systems aims to enhance grid resilience, indirectly boosting copper consumption across distributed energy and storage systems.
I. Demand Side: Power Grid Investment as a Structural Anchor for Copper Consumption
1. Direct Demand Growth: “Tonnage-Level” Pull from UHV and Smart Grids
· UHV Projects:
Each ±800 kV UHV DC transmission line consumes approximately 12,000 tonnes of copper. The 24 lines planned for 2026–2030 are expected to require around 288,000 tonnes of copper in total.
· Smart Distribution Networks:
Rising penetration of smart meters, fault indicators, and automation equipment is projected to drive annual copper demand growth of around 150,000 tonnes.
· EV Charging Infrastructure:
Based on 60 kg of copper per charging pile, China’s target of 70 million chargers by 2030 would translate into 4.2 million tonnes of copper demand.
2. Indirect Demand Growth: “Invisible” Copper Demand from Renewable Integration
· Wind–Solar–Storage Systems:
A 1 GW solar power plant requires 500–800 tonnes of copper, while 1 GW of wind capacity consumes 300–600 tonnes. Under China’s 2030 renewable capacity targets, incremental copper demand could exceed 10 million tonnes.
· Electric Vehicles:
Copper usage per vehicle averages 83 kg for EVs, compared with 4 kg for internal combustion vehicles. With EV ownership projected to reach 150 million units by 2030, this implies additional copper demand of approximately 12.45 million tonnes.
II. Supply Side: Resource Constraints and Capex Shortfalls Build a Copper Price “Moat”
1. Structural Weakness at the Mining Level
· Declining Ore Grades:
Average grades at the world’s top ten copper mines have fallen from 1.5% to 0.6%, pushing mining costs up by around 12%.
· Project Pipeline Gaps:
New copper mines typically require 5–7 years from discovery to production. Global mine supply growth in 2026 is expected to be below 1%.
2. Smelting Bottlenecks Intensify Market Tightness
· Negative Treatment Charges:
Spot copper concentrate TC/RCs have fallen to –USD 45 per tonne, with smelters reportedly losing over RMB 3,000 per tonne of refined copper produced.
· China’s Output Constraints:
China’s refined copper output is projected to reach 11.2 million tonnes in 2025, with year-on-year growth slowing to 3.2%.
III. Price Outlook: Supply–Demand Gaps Drive a “Stepwise” Copper Rally
1. Quantifying the Deficit
· 2025 Forecast:
Global copper demand: 28.3 million tonnes
Global supply: 26.0 million tonnes
Supply–demand gap: 2.3 million tonnes
· 2030 Forecast:
Global copper demand: 36.0 million tonnes
Global supply: 28.0 million tonnes
Supply–demand gap: 8.0 million tonnes
2. Rising Price Benchmarks
· Short Term (2026–2027):
LME copper prices may exceed USD 12,000 per tonne, while SHFE copper could challenge RMB 120,000 per tonne.
· Long Term (2030):
If structural deficits persist, copper prices could test USD 15,000 per tonne, approaching historic highs.
IV. Value Chain Opportunities: Who Benefits from the “Grid Revolution”?
1. Resource Leaders: Hidden Champions with Pricing Power
· Zijin Mining:
Controls over 70 million tonnes of copper resources globally, with production capacity expected to reach 1.5 million tonnes per year by 2026.
· CMOC Group (China Molybdenum):
Expanding copper–cobalt operations in the DRC, ranking among the lowest-cost producers globally.
2. Technology-Driven Players: High-End Differentiation Winners
· Hailiang Group:
The world’s largest copper tube producer, with proprietary 5G base-station copper foil technologies breaking long-standing foreign monopolies.
· Boway Alloy:
Specializes in data center–grade copper alloy materials, delivering gross margins exceeding 40%.
Conclusion
From UHV towers on the Tibetan Plateau to EV chargers lining the streets of Shenzhen; from copper mines in Chile’s Andes to electronic trading screens at the Shanghai Futures Exchange—a global redistribution of copper resources driven by grid investment is underway.
As China’s RMB 4 trillion power grid plan moves from blueprint to execution, copper is no longer merely an industrial metal. It is becoming a strategic commodity at the heart of geopolitical competition. In the convergence of the green energy transition and resource scarcity, the copper bull market may only be at its opening chapter.
Source：Changjiang Nonferrous Metals Network