1. Report Industry Investment Rating - The investment rating for copper is bullish [1] 2. Core Viewpoints of the Report - The shortage at the raw material end continues, with limited cold material supplements, leading to a significant downward adjustment of the marginal growth of global copper mine production in 2025 to 280,000 - 380,000 metric tons. The pressure at the raw material end will further reduce processing fees and impact downstream industries. - The processing profit of the smelting industry continues to deteriorate, with an initial risk of industry - wide losses. The scope of active production cuts overseas is expanding, and the market is focusing on domestic smelting trends. The marginal growth of global refined copper production in 2025 is expected to be 500,000 - 600,000 metric tons. - The marginal growth of traditional demand is weakening, the new - energy demand is slowing down, while the demand from emerging industries is growing strongly. The marginal growth of global copper demand in 2025 is adjusted down to 700,000 - 800,000 metric tons. - Macro factors center around the weakening of the US dollar, and policies from various countries are expected to stimulate the economy. The fundamentals are in a stalemate, with greater potential for supply constraints. In a low - inventory state, the regional balance needs time to recover. It is recommended to focus on structural market trends, with the low point of copper prices in the second half of the year unlikely to break through 74,000 yuan/ton, and the high point may exceed 83,000 yuan/ton [2][3][4][5] 3. Summary by Relevant Catalogs 3.1 Raw Material End 3.1.1 Copper Concentrate - In Chile, the copper supply is in a recovery cycle. From January to April, the cumulative copper production increased by 3.5% year - on - year to 1.752 million metric tons, with an absolute increase of 59,000 metric tons. The government expects a 3% increase in production in 2025 to 5.672 million metric tons, but there are uncertainties. Large - scale projects like Escondida have significant production increases, while some mines like Collahuasi and Anglo American Sur have lower - than - normal production [19][21] - In Peru, the copper mine is in a restorative growth period. From January to April, the cumulative copper production increased by 4.9% year - on - year to 887,000 metric tons, with an absolute increase of about 41,000 metric tons. The government expects the annual production to be around 2.8 million metric tons. Some projects have production differentiations, and the government's policies to stimulate production have limited effects for now [29][31] - In the Democratic Republic of the Congo, the copper production was in a high - growth period but has faced challenges this year. Geopolitical issues, infrastructure weaknesses, and resource nationalism have affected production. The output of the Kamoa - Kakula project has been significantly reduced, and the production forecast for 2025 has been greatly lowered [34][35][36] - In China, copper production has been in a recovery phase since 2022 but is constrained by factors such as ore grade decline and aging mines. The marginal growth of global copper mine production in 2025 is estimated to be 250,000 - 350,000 metric tons, with different trends in different regions [37][40] - From a company perspective, the production of major mining companies in 2024 increased by 3.3% to 17.05 million metric tons. In 2025, the growth is expected to be 2.1% to 17.41 million metric tons, mainly due to disruptions in African mines [42][43] - Regarding new projects, the marginal contribution of new global copper mines before 2028 is decreasing. Policy instability and external environment changes are the main risks for project delays or cancellations [46] 3.1.2 Recycled Materials - Overseas, due to the shortage of copper concentrate, smelters are relying more on cold materials. European smelters are competing for scrap copper, and India is increasing scrap copper imports. The US has new scrap - copper - based processing enterprises, and its scrap copper export ratio is expected to decline [50][52] - In China, smelters' demand for cold materials has increased, but supply has been restricted. From January to May, scrap copper imports decreased by nearly 2% year - on - year to 962,000 physical tons, mainly due to tariff policies and overseas demand. Domestic scrap copper supply is also constrained by fiscal and tax policies and profit margins. The supply of anode copper has also decreased [55][59] 3.1.3 Conclusions and Thoughts - The marginal growth of global copper mine production in 2024 was 530,000 - 550,000 metric tons, and it is adjusted down to 280,000 - 380,000 metric tons in 2025. The copper raw material gap in China is expected to widen in 2025, and copper prices can regulate cold material supply. Attention should be paid to domestic and overseas policies [62][63] 3.2 Smelting End 3.2.1 Domestic Market - The shortage of copper concentrate has led to a decline in processing fees. If the long - term processing fee is set at a low level, Chinese smelters may face industry - wide losses. Sulfuric acid price increases have provided some support, but there are uncertainties. The planned production increase of major listed smelters in 2025 is to 8.5 million tons, but raw material shortages may limit production. The marginal growth of China's refined copper production in 2025 is expected to be 600,000 - 700,000 metric tons [70][77][83] 3.2.2 Overseas Market - In Chile, the decline in refined copper production is significant, with an expected 10% decrease in 2025. Similar situations exist in Mexico. Overseas smelters are showing a trend of production cuts, mainly due to raw material constraints and processing fee decreases. The risk of a decline in overseas refined copper production in 2025 is increasing [86][91][92] 3.2.3 Conclusions and Thoughts - The marginal growth of global refined copper production in 2024 was 650,000 - 700,000 metric tons, and it is expected to be 500,000 - 600,000 metric tons in 2025. The transfer of the raw material shortage to smelters takes time. Attention should be paid to the impact of sulfuric acid prices and cold materials on smelters [94][95] 3.3 Demand End 3.3.1 Macro Level - From an economic cycle perspective, the global economy is in a transition from "recession" to "recovery," with different economic situations in different countries. The US economy shows signs of stagflation, and the Fed's monetary policy shift is uncertain. The US dollar's credit cycle is weakening, and copper's financial attributes are expected to increase [97] - From a manufacturing cycle perspective, the global manufacturing PMI is around 50, and the recovery will be more differentiated. Tariff policies are the core external factor affecting manufacturing [102] - In the long - term, the US fiscal deficit is expected to expand, and the US dollar will continue to depreciate. Copper will play a more important role in resource currency, and investment in copper will provide support [102] 3.3.2 Traditional Demand: China - In the power industry, grid investment is expected to grow steadily, with a focus on UHV projects and distribution network upgrades. Power source investment growth is slowing down, but there may be new drivers in 2026. Overseas exports of electrical equipment have been strong, but are affected by external policies [106][112][115] - In the home appliance industry, domestic air - conditioner sales and production increased in the first four months of 2025. Domestic sales may decline in the third quarter, while overseas sales are relatively strong but face risks from tariff policies. High inventory levels may limit production [117][119] - In the real estate industry, policies are being strengthened, but the industry is still in a bottom - building phase and will drag down copper demand this year, with a possible return to positive demand in 2026 - 2027 [120][121] - In the transportation industry, domestic automobile production is growing strongly, with new - energy vehicles as the main growth driver. However, it is affected by policy subsidies and consumer income expectations. China's automobile exports are facing bottlenecks [122][124] - The marginal growth of China's traditional copper demand in 2024 was 255,000 - 475,000 metric tons, and it is adjusted down to 132,000 - 392,000 metric tons in 2025, with risks in the second half of the year [132] 3.3.3 Traditional Demand: Overseas - In the US, policies have increased inflation expectations and economic uncertainties. The real estate and durable - goods consumption markets show a downward trend but not a significant decline. The US government's policies on power infrastructure and renewable energy will drive copper demand growth [133][136][137]