--- title: "Everbright Securities: The \"anti-involution\" theme is expected to help reassess the value of copper smelting assets" type: "News" locale: "en" url: "https://longbridge.com/en/news/250080356.md" description: "Everbright Securities released a research report stating that if the copper smelting industry implements a \"de-involution\" policy, the value of copper smelting capacity is expected to be reassessed. It is estimated that by 2025, China's electrolytic copper production will reach 1.135 million tons, with a smelting operating rate of 86%. With the implementation of the policy, new copper smelting capacity may be restricted, and the profit prospects for smelting enterprises are expected to improve" datetime: "2025-07-25T06:24:08.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/250080356.md) - [en](https://longbridge.com/en/news/250080356.md) - [zh-HK](https://longbridge.com/zh-HK/news/250080356.md) generator: "portal-rs" --- # Everbright Securities: The "anti-involution" theme is expected to help reassess the value of copper smelting assets According to the Zhitong Finance APP, Everbright Securities released a research report stating that in June 2025, SMM's production of electrolytic copper in China will be 1.135 million tons, with a smelting operating rate of 86%; based on the June production and operating rate, the annualized electrolytic copper capacity in China for June is 15.88 million tons/year. SMM expects there to be an additional 2.975 million tons/year of copper refining capacity yet to be put into production, with approximately 925,000 tons/year and 750,000 tons/year expected to be put into production in 2025 and 2026, respectively, while about 1.3 million tons/year of capacity has an unclear production timeline. If "anti-involution" policies are implemented in the copper industry, it may restrict new copper smelting capacity and accelerate the exit of small and medium-sized smelting capacities, while downstream copper consumption will continue to benefit from the sustained growth of new energy and grid transformation, alleviating the future overcapacity in smelting and improving the subsequent profitability of smelting enterprises. ## The main points of Everbright Securities are as follows: **Event:** (1) On July 1, 2025, the sixth meeting of the Central Financial Committee clearly proposed to govern low-price and disorderly competition among enterprises in accordance with the law and promote the orderly exit of backward production capacity; (2) On July 18, the Ministry of Industry and Information Technology stated at a press conference that a work plan for stable growth in ten key industries, including steel, non-ferrous metals, petrochemicals, and building materials, will be issued soon; the next step will be to continue implementing high-quality development plans for the copper, aluminum, and gold industries and to implement a new round of stable growth work plans for the non-ferrous metal industry, promoting the industry to achieve effective qualitative improvement and reasonable quantitative growth. **Production: In 2024, China's electrolytic copper production will account for 59% of the global total, with a domestic capacity CR10 of about 76%** In 2024, China's electrolytic copper production will be 13.64 million tons, accounting for 59% of the global primary electrolytic copper production; in 2004, China's electrolytic copper production was only 2.035 million tons (15% of the global total), with a compound annual growth rate of 10% during this period. The growth in China's electrolytic copper production is attributed to: 1) rapid growth in China's copper demand; 2) large exports of copper downstream products such as cables and home appliances; 3) China's smelting technology is globally leading, characterized by high value-added and labor-intensive features. According to Baichuan Yingfu's sample capacity, smelting enterprises are mainly state-owned enterprises, with a CR10 of about 76%. In 2024, Jiangxi Copper's copper production will be 2.29 million tons, Tongling Nonferrous Metals 1.77 million tons, Jinchuan Group 1.33 million tons, Yunnan Copper 1.206 million tons, and Zijin Mining 750,000 tons, accounting for 17%, 13%, 10%, 9%, and 5% of domestic production, respectively. **Capacity Expansion: In June 2025, the smelting operating rate will be about 86%, with 2.98 million tons of capacity yet to be put into production (June 2025 capacity is about 15.88 million tons/year)** In June 2025, SMM's electrolytic copper production in China will be 1.135 million tons, with a smelting operating rate of 86%; based on the June production and operating rate, the annualized electrolytic copper capacity in China for June is 15.88 million tons/year. SMM expects there to be an additional 2.975 million tons/year of copper refining capacity yet to be put into production, with approximately 925,000 tons/year and 750,000 tons/year expected to be put into production in 2025 and 2026, respectively, while about 1.3 million tons/year of capacity has an unclear production timeline. **Profit: Processing fees drop to 0, relying on profits from by-products such as sulfuric acid** TC/RC is the rough smelting/refining fee that mining companies pay to smelting enterprises to convert copper ore into electrolytic copper. The tightness of copper concentrate combined with the rapid expansion of China's smelting capacity has led to a continuous decline in TC since 2024 (1) Spot: As of July 18, 2025, the TC spot price is -$43.2/ton, at a historical low. (2) Long-term contracts: The current benchmark price for long-term contracts executed by smelting companies is $21.25/ton, signed at the end of 2024; while the processing fee for long-term contracts in mid-2025 has dropped to $0/ton. This means smelting companies have no processing fee income and can only rely on profits from by-products such as sulfuric acid, minor metals, and excess recovery rates. If sulfuric acid prices decline further, smelting companies may face losses. **Target Aspect** Focus on companies with low copper mine self-sufficiency but large smelting capacity, such as TNMG (000630.SZ) (the second phase of the Mirador copper mine has been trial-operated since July 2025, expected to ramp up production in 2026), China Daye Non-Ferrous Metals (00661), JIANGXI COPPER (600362.SH), and Yunnan Copper (000878.SZ). **Risk Warning** Policy advancement may fall short of expectations, and the exit of backward production capacity may not meet expectations; demand risks may also be below expectations ### Related Stocks - [600362.CN](https://longbridge.com/en/quote/600362.CN.md) - [00358.HK](https://longbridge.com/en/quote/00358.HK.md) - [000630.CN](https://longbridge.com/en/quote/000630.CN.md) - [000878.CN](https://longbridge.com/en/quote/000878.CN.md) ## Related News & Research - [GRAPHIC-Take Five: AI trade meets the Fed](https://longbridge.com/en/news/302836715.md) - [Oracle Stocks Edge Up as $1 Billion Backs AI Partners](https://longbridge.com/en/news/302919901.md) - [U.S. oil exports to Asia plunge as war disrupts shipping, lifting tanker rates to record high](https://longbridge.com/en/news/302792281.md) - [IREN Stock: Why Analysts Still See Over 200% Upside Despite This Week's Plunge](https://longbridge.com/en/news/302922686.md) - [Why Did Analysts Slash Bloom Energy Stock (BE) Price Targets Despite Praising Q3 Earnings Beats?](https://longbridge.com/en/news/302920834.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**