"China's copper processing industry has withstood the test in the process of coordinating epidemic prevention and control and resuming production, and the overall situation is far better than expected." Fan Shunke, deputy party committee of China Nonferrous Metals Industry Association and President of China nonferrous metal processing industry association, said at the 2020 annual meeting of China copper processing industry and the high quality development conference of China (Tongling) copper industry.

    According to the data of the National Bureau of statistics, in the first half of 2020, China's copper processing timber output was 9.397 million tons, an increase of 6.1% year-on-year. Although China's novel coronavirus pneumonia epidemic situation is running smoothly, China's copper processing industry is facing challenges. 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 copper processing industry needs to be improved. On the one hand novel coronavirus pneumonia and domestic demand are not squeezed by international trade friction, new domestic demand is not strong, and on the other hand, there is still excess capacity in the middle and low end, and disorder competition still exists, which needs urgent adjustment and self-discipline. Ge Honglin, member of the Standing Committee of the National Committee of the Chinese people's Political Consultative Conference and the Party committee of the China non ferrous metals industry association, pointed out the environment faced by the copper processing industry in his speech at the meeting.

    After years of development, China's copper processing capacity has expanded rapidly and has been ranked in the world for 16 consecutive years. However, the rapid expansion of production capacity has also brought about overcapacity, especially the fierce competition of medium and low-end products. Fan Shunke introduced that almost all the major subdivision varieties of copper processing were surplus, such as copper rod, copper tube, copper strip, copper rod and copper wire, and the homogenization competition was fierce.

    With the continuous expansion of production capacity, copper processing costs have also been declining. It is reported that the copper tube and copper rod industry is facing fierce competition. In order to seize the market share, the processing fee has decreased continuously in recent years, which is close to or even lower than the cost price. The copper foil industry, which used to have relatively high processing costs, has also started to reduce prices substantially.

    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 new production capacity, competition in the copper foil market of conventional electronic circuits has intensified, and the supply exceeds demand. The market price of some low-end copper foil varieties has been lower than the cost price. He said that since the second half of 2019, the demand for copper foil for lithium batteries has fallen sharply due to the less than expected development of the new energy vehicle industry. Moreover, a large number of new capacity of lithium battery copper foil began to release, the market competition was fierce, the sales price dropped rapidly, the loan recovery of lithium battery copper foil enterprises was difficult, and the business efficiency of enterprises declined significantly. At present, the new and expanded capacity is still on a large scale. According to the survey by the branch of electronic copper foil materials, there will be a new capacity of 88000 tons of copper foil for lithium batteries in China in 2020. It is estimated that by the end of 2020, the capacity of copper foil for 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 products will reach 4.31 billion yuan, a year-on-year decrease of 37.4%, and the benefits will drop sharply.

    On the one hand, there is excess capacity in the middle and low end, on the other hand, the supply of high-end products is insufficient. Ge Honglin pointed out that at present, the high-end products of the copper industry are still under the control of people, and the independent innovation ability is insufficient, and the collaborative innovation and development mechanism of the upstream and downstream of high-end copper materials has not yet formed. For example, high performance lead frame copper alloy strip for VLSI, high-end calendered copper foil and high-frequency high-speed electrolytic copper foil are still dependent on imports. In addition, the international ecosystem of copper processing industry has not yet formed. At present, the supply chain of high-end market is mainly controlled by Europe, the United States, Japan and South Korea. "These problems have become the main obstacles to the realization of high quality, high price and high quality development of China's copper processing industry." 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. Since 2018, 5g, artificial intelligence, big data, automotive electronics and other markets have developed rapidly, and the related PCB industry is developing towards high precision, high speed and high reliability. In this context, the demand for high-end and high-performance copper foil, such as high-frequency and high-speed circuit copper foil, IC packaging and loading board with very thin copper foil, high-power and high-current circuit with thick copper foil, the demand growth is obvious The price is firm.

    Breakthrough in new product development

    The industrialization process is speeding up

    In the face of increasingly fierce competition, industrial enterprises have begun to change product structure, actively develop new products, and enhance the competitiveness of enterprises through independent innovation and development of high-end products.

    "If we only rely on simple price reduction mode to obtain market orders, we may fall into the situation that the weak tear each other, and the more tear the weaker." Cao qinrun, the Party committee and executive director of Chinalco Luoyang Copper Processing Co., Ltd., said that domestic copper processing enterprises should benchmark the product quality of the world's * * and continuously improve the use standard of copper processing materials.

    With the continuous deepening of innovation, in recent years, the industrialization process of scientific and technological achievements in copper processing industry and the pace of replacing imports are also accelerating.

    "New infrastructure" boost

    Prospect of copper alloy material demand

    This year, the central government has increased 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 network and data center.

    As a kind of functional and structural material, copper has good conductivity, thermal conductivity and high strength. "New infrastructure" projects rely more on copper than traditional infrastructure projects, such as laying copper cable contact wire for intercity high-speed railway and urban rail transit, copper foil for 5g base station construction, substantial increase in copper consumption for new energy vehicles and charging piles, and large data center projects require a considerable amount of electronic components.

    According to the statistics of the International Copper Association, 23 kg copper is used for internal combustion engines of traditional automobiles, 40 kg for hybrid electric vehicles, 60 kg for plug-in hybrid electric vehicles and 83 kg for electric vehicles.

    Cao qinrun said that the "new infrastructure" will drive a new round of industry, and the demand for copper and copper alloy materials in 5g base station, UHV, new energy vehicles, intercity high-speed railway and rail transit, big data center and other fields will also continue to increase; "New infrastructure" will also drive and cultivate the development of domestic emerging industries, promote the demand for localization of high-end products, and realize the import substitution of key basic materials. "The copper processing industry is not only the 'Foundation' of the 'new infrastructure', but also the 'key point' of the development of the 'new infrastructure'. The prospects of copper and copper alloy materials are promising." He said.

    Fan Shunke also said that we should deeply understand the new situation, give full play to China's potential and role as the world's largest market, seize the new demand for high-end copper based materials brought by the "new infrastructure", and fully meet the demand for increasing high-end copper strips, foils, rods and wires brought about by new energy vehicle piles, 5g base stations, industrial Internet, big data center and artificial intelligence. At the same time, we should transform the new demand into a new driving force for independent innovation, increase investment in science and technology, accelerate the research and development of high-end products and personalized products, and promote the high-quality development of the industry.

    "I hope you will continue to work hard to cultivate new opportunities in the crisis, open up a new situation in the changing situation, actively plan a new development pattern of China's copper processing industry with the domestic large cycle as the main body and the domestic and international dual circulation promoting each other, so as to build China into a world copper processing power." Ge Honglin said.

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