Copper Prices Surge Amid Booming New Energy Sector Demand

Analysis of Current Development, Future Prospects of New Energy Industry and the Importance of Copper

I. Current Development Status of New Energy Industry

The global energy structure is undergoing a profound transformation, and new energy has become the core force driving carbon neutrality. In 2024, China's new installed capacity of wind power reached 86.99 GW, and the new installed capacity of photovoltaic power was 277.57 GW. The new installed capacity of nuclear power and biomass energy was 3.84 GW and 2.85 GW respectively, and the total installed capacity of renewable energy accounted for 53.8% of the national power generation total. Technological iteration and large-scale production have driven costs to continuously decline. For example, the conversion efficiency of heterojunction photovoltaic cells exceeded 25%, and the production cost of solid-state batteries dropped below 500 yuan/kWh. China, with a complete industrial chain layout, holds a global leading position in silicon materials, wind turbine complete sets, etc. In 2024, the proportion of photovoltaic and wind power in the total electricity consumption of the society reached 20%, and the rates of wind and solar power curtailment dropped to 2.8% and 1.9% respectively. At the policy level, under the impetus of the "carbon neutrality" strategy, the "14th Five-Year Plan for Energy Technology Innovation" clearly proposed the construction of a new power system. Local governments accelerate industrial collaboration through cluster development and overseas expansion models.

II. Future Prospects of New Energy Industry

It is expected that the global market size of new energy will exceed tens of trillions of US dollars in 2025, with an annual compound growth rate of over 12%. Photovoltaic, wind power and new energy vehicles will be the main growth engines. China plans to increase the proportion of photovoltaic and wind power-generated electricity to over 25% by 2025, and the new transmission capacity of the ultra-high voltage power grid will increase by more than 300 million kilowatts. The cross-regional allocation mechanism will be further improved. Technological innovation focuses on energy storage and smart grids, and multiple routes such as liquid flow batteries and compressed air energy storage have achieved breakthroughs. The energy internet technology promotes multi-energy complementarity. However, the industry faces structural challenges, such as barriers from the United States and Europe (e.g., IRA Act), and the decline in profits of photovoltaic enterprises may inhibit investment. China's new installed capacity of photovoltaic power is expected to slow down to 215-255 GW in 2025.

III. Importance of Copper in New Energy Industry

As a highly conductive metal, copper serves as a critical raw material in the new energy industrial chain, with demand growth stemming from three key areas:

1. New Energy Vehicles: Battery electric vehicles (BEVs) require 83kg of copper per unit, plug-in hybrid electric vehicles (PHEVs) 60kg—four times that of traditional fuel vehicles. China's copper demand for NEVs is projected to grow 20% to 1.14 million tonnes by 2025.
2. Renewable Power Generation: Wind power requires 6 tonnes of copper per MW, while solar PV needs 4 tonnes per MW. With 2025 wind power installations expected to reach 105-115GW, corresponding copper demand will hit 660,000 tonnes. Despite slower PV growth, copper demand in this sector will remain at 1.04 million tonnes.
3. Energy Storage and Power Grids: Copper is primarily used in battery anodes and cables within energy storage systems. In 2025, combined PV and energy storage sectors will drive 1.39 million tonnes of copper demand, accounting for 3% of 2020 global consumption.

Comprehensive estimates indicate that incremental copper demand from wind, NEVs, PV, and energy storage will reach 1.81 million tonnes by 2025, representing 7% of 2020 global copper consumption. However, copper supply faces challenges including declining ore grades, geopolitical disruptions (e.g., Chile's Glacier Law restricting mining), and low inventories. A tight supply-demand balance may push copper prices higher, with LME copper expected to trade between 8,500-11,000 USD/tonne in 2025.

Copper demand growth is deeply intertwined with new energy industry expansion, yet supply bottlenecks could become a critical constraint—highlighting the importance of resource security and technological alternatives (e.g., aluminum applications in specific scenarios).