China's Industrial Metals Market: Strategic Opportunities Amid Policy Support and Global Uncertainty

China's industrial metals market is undergoing a seismic shift as Beijing's 2025 policy agenda accelerates the transition to high-tech, green, and self-reliant manufacturing. From copper to gold and silver, the interplay of strategic accumulation, infrastructure investment, and de-dollarization efforts is reshaping demand dynamics, creating compelling investment opportunities for those who understand the nuances of this evolving landscape.

Copper: The Backbone of China's Green and Industrial Revolution

Copper demand in China is surging, driven by the rapid expansion of electric vehicles (EVs), renewable energy infrastructure, and advanced manufacturing. In 2025, new energy vehicle (NEV) production hit 1.234 million units in June alone—a 18.8% year-on-year increase—while wind and solar capacity additions grew by 18.5% and 18.8%, respectively. These trends are fueling a 1.9% year-on-year rise in global copper demand, with China accounting for over 40% of this growth.

Key Producers with Strategic Exposure
- CMOC Group (CMCLF, 3993.HK): As one of China's largest mining firms, CMOC's Tenke Fungurume Mine in the DRC produced 450,138 metric tons of copper in 2024. Its joint venture with CATL at the Kisanfu project further cements its role in supplying cobalt and copper for EV batteries.
- Jiangxi Copper Corporation: China's largest copper producer, Jiangxi Copper controls the Dexing Copper Mine, Asia's largest open-pit operation, with annual output exceeding 150,000 tons of refined copper. Its vertical integration across the supply chain positions it to benefit from rising global demand.

Gold: A Strategic Reserve in a Multipolar World

China's gold demand is being reshaped by the People's Bank of China (PBOC)'s disciplined accumulation and institutional mandates. In 2025, the PBOC executed large-scale purchases at key price points ($3,300 in April, $3,200 in May), bypassing traditional reporting mechanisms to build a gold-backed alternative to dollar dominance. Meanwhile, a mandate requiring Chinese insurance companies to allocate 1% of their $32 trillion+ assets to physical gold could drive demand equivalent to one year of global mine production if fulfilled.

Investment Highlights
- Shanghai Gold Exchange (SGE): The SGE has become a critical hub for institutional buyers, with Asian ETF demand exceeding 2024's annual total by April 2025. This shift is creating a “price floor” for gold, with each pullback supported at higher levels.
- Hong Kong Gold Warehouses: Designated as an international storage hub, these facilities facilitate the PBOC's global vault network, enabling oil-for-gold transactions and strengthening China's pricing influence.

Silver: Industrial Demand vs. Regulatory Vulnerability

While silver remains more susceptible to price manipulation due to its unregulated status, China's industrial demand is a stabilizing force. The gold-silver ratio, currently at 98:1, suggests potential for silver to rise as the ratio normalizes. Institutional buyers in China and India are driving physical demand, with premiums of $10–$100 per ounce for large orders. However, silver's dual role as an industrial and monetary metal complicates its trajectory.

Key Exposure
- Indian and Chinese Industrial Demand: China's electronics and solar manufacturing sectors account for a significant portion of global silver consumption. As the EV and renewable energy booms continue, silver's industrial demand will remain resilient.

The Geopolitical Angle: De-Dollarization and BRICS

China's de-dollarization efforts, including the gold-backed M-Bridge system under BRICS, are accelerating. The PBOC's expansion of global vaults in Saudi Arabia, Brazil, and Mexico underscores its intent to diversify reserves and reduce reliance on Western financial systems. These moves are not just strategic—they are economically transformative, creating a new pricing paradigm where physical demand, not speculative paper markets, sets value.

Conclusion: Navigating the New Era of Metals Investment

For investors, the key takeaway is clear: China's industrial policies are creating a structural shift in metals demand. Copper producers with exposure to EVs and renewables, gold firms benefiting from PBOC accumulation, and silver's potential to normalize with gold all offer compelling opportunities. However, risks remain—global growth slowdowns, U.S. tariffs, and regulatory shifts could temper short-term gains.

Investment Strategy
- Long-term Positioning: Prioritize companies like CMOC and Jiangxi Copper, which are directly aligned with China's green and high-tech manufacturing goals.
- Gold Allocation: Consider ETFs linked to the SGE or physical gold producers with PBOC ties, such as Hong Kong-based vault operators.
- Silver Caution: While industrial demand is strong, silver's susceptibility to manipulation warrants a balanced approach, favoring producers with diversified exposure.

In this era of global uncertainty, China's industrial metals market is not just a barometer of economic health—it is a battleground for the future of global finance. Investors who recognize this shift early may find themselves at the forefront of a new industrial revolution.