Does China's copper semis market need more capacity?
The copper semis market in China has been enjoying robust growth since the new millennium driven by a growing domestic end-use market and the desire to replace imported copper semis. On the back of low barriers to entry and high profitability, it comes as no surprise that the country's semi-fabricating industry has reached a state of overcapacity similar to many other Chinese industries. However, more than 2Mt of new capacity came online in 2016. At the same time, China's second-largest copper tube producer announced plans for five new copper tube plants in China, Vietnam and the US with a total incremental capacity of 275 kt. In this insight we will examine the market from three perspectives – production, capacity and trade – to explain why we believe there is no need for further capacity additions in the semis fabricating industry, at least, not until 2035. This assumes the country will continue to fulfil its requirements for copper semis with its domestic production.