Analysis of the Development Prospects of Copper Processing Industry

The copper processing industry defines copper processing products as copper and copper based alloy products. The properties of copper and copper based alloys make them applicable in multiple fields. Copper has good processability, high electrical and thermal conductivity, satisfactory strength, and good corrosion resistance. Copper based alloys are made by melting copper as the base material and adding other auxiliary metals such as tin, zinc, and nickel, which improves the workability and functionality of copper. Copper based alloys have high electrical and thermal conductivity, excellent physical properties, and are easy to process. Copper processing products have a wide range of applications, and the copper processing industry involves many downstream industries. Among them, industries that use a large amount of copper include power and transmission equipment, home appliances, electronic information, building decoration, etc. The growth of product output in these industries will directly increase the demand for copper processing products, so they are closely related to the copper processing industry. The copper processing industry is an important sector in the national economy. Copper and copper alloys, as the earliest metal materials used in human history, are widely used in industries such as household appliances, electricity, automobiles, construction, electronic instruments and meters, national defense, transportation, and marine engineering. Driven by downstream demand, China's copper processing industry has shown a stable growth trend in recent years, with industry output gradually expanding and becoming a major producer of copper materials worldwide. Copper processing materials have a wide range of applications, involving almost all sectors of the national economy. The industries with high consumption of copper products in China mainly include electricity, construction, household appliances, transportation, and electronic communication.

1) Downstream industry of electrified railway contact network products

Electrified railway contact wires and load-bearing cables are key equipment of electrified railways, mainly used in the construction and maintenance of electrified railways. In recent years, the construction of electrified railways in China has been rapidly developing, which has brought huge market demand for contact network products. In the future, the focus of China's railway construction will shift to the construction of railway networks in the central and western regions, as well as the construction of intercity railways in the eastern urban agglomeration. The planned construction tasks and related investments will continue to grow, providing strong market guarantees for the sustainable development of the railway contact network equipment industry.

2) Downstream industry of copper busbar products

Copper busbar products are mainly used in the fields of power generation and transmission and distribution. Almost all large venues and construction projects will use busbar equipment, and the application scope is very wide. Its market demand is closely related to the development of the national economy. China is currently in a rapid stage of industrialization and urbanization, with increasing investment in infrastructure such as electricity, new rural construction, and transportation. The rapid advancement of new energy, new materials, information consumption, and new urbanization will lead to a steady growth in demand for copper busbars in related industries.

3. The trend and reasons for changes in industry profits

Copper processing products mainly adopt the pricing form of "raw material price (copper price)+processing fee", among which the market price of copper materials is relatively transparent, and the profit level of copper processing enterprises mainly depends on processing fees. Due to the wide range of applications of copper processing products, there are differences in technology, processing difficulty, market competition, and other aspects among products in different application fields, resulting in significant differences in processing costs among products in different fields. Overall, the copper processing industry in China is dominated by small and medium-sized manufacturers, whose products are mainly primary copper processing products with low technological content and high similarity. The market is highly competitive due to homogenization, which weakens the profitability of manufacturers.

In the "Guiding Catalogue for Industrial Structure Adjustment (Revised in 2013)" released by the National Development and Reform Commission, "the production of non-ferrous metal new materials in transportation, high-end manufacturing, and other fields" is listed as an encouraged industry; In the 2015 Catalogue of Key High tech Fields Supported by the State, "production technology for high-performance copper alloy materials (high-strength, high conductivity, lead-free brass, etc.)", "copper alloy materials and products", and "metals with obvious advantages in high pressure resistance, wear resistance, corrosion resistance, improved conductivity, thermal conductivity, etc." are also listed as key high-tech fields supported by the state; The "Plan for Adjustment and Revitalization of Nonferrous Metals Industry" proposes to strengthen the research and development of production processes for high-performance specialized copper and aluminum materials; Intensify financing support for key non-ferrous metal enterprises, and provide support in issuing stocks, corporate bonds, corporate bonds, and bank loans for projects that comply with industrial policies, environmental protection, land laws and regulations, and investment management regulations, as well as for enterprises that implement mergers and acquisitions, restructuring, "going global" and technological transformation.