SMM: "China's copper processing industry has withstood the test in the process of co-ordinating epidemic prevention and control and resuming work and production, and the overall situation is much better than expected." Fan Shunke, deputy secretary of the party committee of China Nonferrous Metal Industry Association and chairman of China Nonferrous Metal processing Industry Association, said when attending the 2020 annual meeting of China's copper processing industry and the high-quality development conference of China's (Tongling) copper industry.
According to the National Bureau of Statistics, China produced 9.397 million tons of copper processing materials in the first half of 2020, an increase of 6.1 per cent over the same period last year. Although the overall operation of the industry is stable, the development of China's copper processing industry is also facing challenges under the regular prevention and control of the COVID-19 epidemic. At this conference, professionals from the industrial chain gathered together to discuss how China's copper processing industry can turn crisis into opportunity and find a high-quality development path under the great changes.
Fierce competition in copper processing market
High-end products are still controlled by others.
"at present, the internal and external environment of the copper processing industry is in urgent need of improvement. On the one hand, it is squeezed by international trade frictions, the COVID-19 epidemic, and weak domestic demand; on the other hand, relative overcapacity and disorderly competition still exist at the middle and low end, and there is an urgent need for adjustment and self-discipline. " GE Honglin, member of the standing Committee of the CPPCC National Committee and secretary of the party committee of the China Nonferrous Metals Industry Association, pointed out the environment facing the copper processing industry in a speech at the meeting.
After years of development, China's copper processing capacity has expanded rapidly and has ranked first in the world for 16 consecutive years. However, the rapid expansion of capacity has also brought about overcapacity, especially the competition between middle and low-end products is more fierce. According to Fan Shunke, almost all the main subdivision varieties of copper processing are in surplus, such as copper rods, copper tubes, copper strips, copper rods and copper wires, and the homogenization competition is fierce.
Production capacity continues to expand, copper processing fees are also falling all the way. It is reported that the copper pipe, copper rod industry competition is the most fierce, in order to seize market share, in recent years, the processing fee has declined continuously, has been close to or even lower than the cost price; in the past, the copper foil industry with relatively high processing fees also began to significantly reduce prices.
Leng Daguang, deputy secretary general of China Electronic Materials Industry Association and secretary general of Electronic Copper foil Materials Branch, said that with the release of a large amount of new production capacity, competition in the copper foil market for conventional electronic circuits has intensified and supply exceeds demand. the market prices of some low-end copper foil varieties have been lower than the cost price. He said that since the second half of 2019, due to the lower-than-expected development of the new energy vehicle industry, the demand for copper foil for lithium batteries has fallen sharply. Moreover, the new production capacity of lithium battery copper foil began to release in large quantities, the market competition was fierce, the sales price dropped rapidly, the loan recovery of lithium battery copper foil enterprises was difficult, and the operating efficiency of enterprises declined significantly. At present, new construction and expansion of production capacity are still being carried out on a large scale. According to the survey of Electronic Copper foil Materials Branch, there will be 88000 tons of new production capacity of copper foil for lithium batteries in China in 2020. It is estimated that by the end of 2020, the copper foil production capacity of lithium battery in China will reach 287000 tons.
According to the data of the National Bureau of Statistics, from January to June 2020, the profit of copper was 4.31 billion yuan, down 37.4% from the same period last year.
On the one hand, there is excess capacity at the middle and low end, and on the other hand, there is a shortage of high-end products. GE Honglin pointed out that at present, the high-end products of the copper industry are still under control, the ability of independent innovation is insufficient, and the development mechanism of collaborative innovation between upstream and downstream of high-end copper materials has not yet been formed. For example, some fields such as high-performance lead frame copper alloy strip for VLSI, high-end Calendering copper foil, high-frequency and high-speed electrolytic copper foil still rely on imports. In addition, the international ecosphere of the copper processing industry has not yet been formed. At present, the supply chain of the high-end market is mainly controlled by Europe, the United States, Japan and South Korea, so it is difficult for Chinese products to enter its supply chain system. "these problems have become the main obstacles for China's copper processing industry to achieve high quality, high price and high quality development." He said.
Leng Daguang also said that at present, the high-end copper foil market is still occupied by Japanese and European copper foil manufacturers. From 2018, 5G, artificial intelligence, big data, automotive electronics and other markets are developing rapidly, and the relevant PCB industries are developing in the direction of high precision, high speed and high reliability. Under this background, for high-grade high-performance copper foil, such as copper foil for high-frequency and high-speed lines, very thin copper foil for IC packaging carrier plate, thick copper foil for high-power and high-current circuits, etc., the demand growth rate is obvious, the supply is tight and the price is firm.
There is a breakthrough in the research and development of new products.
The process of industrialization is accelerated.
In the face of increasingly fierce competition, industry enterprises have begun to change the product structure, actively develop new products, through independent innovation, the development of high-end products to enhance the competitiveness of enterprises.
"if you only rely on a simple price reduction model to get market orders, you may fall into a situation where the weak tear each other and get weaker and weaker." Cao Qinrun, party committee secretary and executive director of Chinalco Luoyang Copper processing Co., Ltd., said that domestic copper processing enterprises should mark world-class product quality and continue to improve the use standards of copper processing materials.
With the continuous deepening of innovation, in recent years, the industrialization of scientific and technological achievements in the copper processing industry and the pace of alternative imports are also accelerating.
Zhongse Obot Copper and Aluminum Co., Ltd. has made progress in the research and development of imported alternative copper alloy strip and foil, and has successfully developed high flexural rolling copper foil, low roughness surface treatment calendered copper foil and ultra-high strength and high elastic CuNiSn alloy, which can be used in 5G communications, aeronautical elastic components, mobile phone auto-focusing motor shrapnel, 5G base station shielding shrapnel and household appliance contact parts, etc.
Lingbao Jinyuan Zhaohui Copper Co., Ltd. has established a project to tackle the problem of high corrosion resistance Calendering copper foil, which can solve the defects such as easy oxidation and rust of ordinary copper foil when end customers such as mobile phone CPU, antenna and other products are used in high temperature and high humidity environment. At present, the product has passed the testing and certification of terminal customers at home and abroad, breaking the monopoly situation of the product and realizing localization. At the same time, Chaohui Copper also plans to focus on conquering the market of blackened Calendering copper foil and wireless red Calendering copper foil in the field of FCCL, so as to break the monopoly of imported products.
Jinlong Precision Copper Tube Group Co., Ltd. and Zhejiang Hailiang Co., Ltd., two leading copper pipe production enterprises, are through the research, development and improvement of new products and new technologies, such as copper tube material upgrading and pipe structure optimization, to meet the ever-changing needs of the air-conditioning industry and the continuous improvement of the quality and performance of copper pipe products in the downstream industry.
Boost by "new infrastructure"
The demand prospect of copper alloy materials is promising.
This year, the central policy has stepped up the construction of "new infrastructure". On March 4, 2020, the standing Committee of the political Bureau of the CPC Central Committee held a meeting to further emphasize the need to speed up the construction of new infrastructure such as 5G networks and data centers.
As a material with integrated function and structure, copper has good electrical conductivity, thermal conductivity and high strength. "New infrastructure" projects are significantly more dependent on copper than traditional infrastructure projects, such as intercity high-speed railway and urban rail transit need to lay copper contact lines, 5G base stations need copper foil, new energy vehicles and charging piles have greatly increased copper consumption, as well as projects such as big data Center need a considerable number of electronic components.
According to the International Copper Association, 23 kilograms of copper are used for internal combustion engines of traditional cars, 40 kilograms of copper for hybrid electric vehicles, 60 kilograms of copper for plug-in hybrid electric vehicles and 83 kilograms of copper for electric vehicles.
Cao Qinrun said that the "new infrastructure" will stimulate a new round of industrial revolution, and the demand for copper and copper alloy materials in areas such as 5G base stations, UHV, new energy vehicles, intercity high-speed railway and rail transit, and big data Center will also increase; "new infrastructure" will also promote and foster the development of domestic emerging industries, promote the demand for localization of high-end products, and achieve import substitution of key basic materials. "the copper processing industry is not only the 'foundation' of the 'new infrastructure', but also the 'focus' of the development of the 'new infrastructure'. The prospect of copper and copper alloy materials is promising." He said.
Fan Shunke also said that it is necessary to deeply understand the new changes, give full play to China's potential and role as the world's largest market, and seize the new demand for high-end copper-based materials brought about by the "new infrastructure". Fully meet the needs of new energy vehicle piles, 5G base stations, industrial Internet, big data center, and artificial intelligence to increase the demand for high-end copper strips, foils, rods, and lines. At the same time, it is necessary to turn new demand into a new driving force for independent innovation, increase investment in science and technology, speed up the research and development of high-end and personalized products, and promote the high-quality development of the industry.
"I hope that everyone will keep up their efforts, cultivate new opportunities in the crisis, open up a new situation in the changing situation, and actively plan a new pattern of the development of China's copper processing industry with the domestic great cycle as the main body and the domestic and international double cycles promote each other, and strive to build China into a world copper processing power." GE Honglin said.
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