BEIJING, June 3 (Xinhua) -- Copper, long viewed as a cornerstone of conventional manufacturing, is playing a more prominent part in China's shift to an innovation-led economy, as booming demand and industrial upgrading are being pushed by rising sectors such as artificial intelligence (AI) and electric cars.

At a copper processing enterprise in Ningbo, east China's Zhejiang Province, copper ingots are rolled, annealed and cleaned before being turned into copper strip products used in high-speed connectors for AI servers, data centers and communication equipment.

Orders have surged this year as China accelerates the construction of intelligent computing centers, with demand outpacing supply, said a company executive.

Strong demand is also being felt in the new energy vehicle (NEV) sector. Ningbo Jintian Copper (Group) Co., Ltd., a leading global copper processor, said orders for high-voltage flat magnet wire used in NEVs have already been booked through the second half of 2027.

The company purchases about 1.9 million tonnes of primary and recycled copper annually. In March, it recorded the highest monthly output in its history, exceeding 190,000 tonnes, according to Ding Xingchi, senior vice president of the company.

A typical NEV uses three to five times as much copper as a gasoline-powered vehicle, according to Wind data. AI data centers also are far more copper-intensive than traditional facilities, with the fast increase in computing capacity and associated power infrastructure fueling demand for products like high-purity copper foil and precision copper cables.

Industry forecasts suggest that China's copper demand from the NEV sector alone will reach 1.84 million tonnes in 2026 and surpass 2 million tonnes in 2027. Globally, copper consumed by data centers may rise from 740,000 tonnes this year to 1.3 million tonnes by 2028.

Apart from robust demand, operational disruptions in major copper-producing regions worldwide have constrained supply-side output, while tensions in the Middle East have disrupted supplies of sulfur, a key raw material for copper smelting, further tightening the spot market -- all contributing to higher copper prices this year.

On the London Metal Exchange, three-month copper futures have risen nearly 10 percent this year as of late May. Domestically, the most-active copper contract on the Shanghai Futures Exchange surged from around 92,000 yuan (about 13,492 U.S. dollars) per tonne at the end of March to over 106,000 yuan on Wednesday.

The increased prices have benefited upstream producers. In Dexing, one of China's largest copper-mining bases in east China's Jiangxi Province, mining operations are running around the clock to meet demand. Rising prices have improved the value of lower-grade ores, prompting companies to expand exploration and bring previously less economical reserves into production.

According to Gu Fengda, chief analyst at Guosen Futures, higher copper prices significantly improved earnings across the copper mining and processing sector in the first quarter, strengthening corporate cash flows and enhancing companies' ability to allocate capital.

However, he noted that sharp price swings also pose challenges, requiring firms to improve hedging strategies, inventory management and capital efficiency.

Facing elevated copper prices and intensifying competition in downstream markets, manufacturers are stepping up investment in research and development, seeking to reduce copper use while moving into higher-value-added segments.

Innovation is aiding industries in using copper more efficiently. In central China's Hubei Province, engineers have developed ultra-thin copper foil measuring just 3 micrometers thick -- roughly one twenty-fifth the diameter of a human hair. The product, now in mass production, significantly reduces copper usage and enhances NEV battery performance.

Meanwhile, Jintian Copper upgraded its recycled-copper processing technology, keeping its refined copper purity at 99.99 percent to meet the stringent requirements of high-tech industries.

Official data showed that China's refined copper output reached 3.785 million tonnes in the first quarter of 2026, up 9.3 percent year on year, while copper material output rose 4 percent to 5.633 million tonnes.

Under a plan to boost the high-quality development of the copper sector, China aims to strengthen the resilience and security of its copper supply chain, achieve breakthroughs in key technologies and high-end materials, enhance advanced equipment manufacturing capabilities and foster a new generation of competitive copper enterprises by 2027.

Gu noted that with global supply shortages persisting for products such as premium copper strip, ultra-thin copper foil and specialty copper alloys, China's domestic production capacity for high-end copper materials will continue expanding, particularly in semiconductors and advanced electronics.

In the long run, technological innovation will be key to coping with cost pressures and creating value, said Hu Haibin, chief analyst at the futures department of Jiangxi Copper Corporation Limited.