From the perspective of copper consumption structure, the largest consumption area is in power cables, followed by household appliances and automobiles, and finally light industry and other industries. It can be found that consumption in traditional sectors is likely to reach a peak in 2015, while new growth will come from new energy power generation and new energy vehicles, but from a small base.
Specific implementation of copper, copper rod processing costs in late June after a short-term recovery, fell again at the end of June and early July, which means that copper rod consumption mainly stems from the copper price correction under the replenishment of the warehouse, is not sustainable. Research data show that on July 1, 8mm copper rod processing costs fell to 400-600 yuan/ton, on June 21 solstice 25 once rebounded to 450-650 yuan/ton.
At present, the bright spot of copper consumption still lies in copper foil, which is mainly due to the lack of domestic high-end copper foil production capacity, while the demand for most high-tech products and even copper foil for new energy vehicles is growing rapidly. However, copper foil accounts for a small proportion of total copper consumption, only about 6%, so it is difficult to drive overall copper consumption up. Data from the Nonferrous Metals Industry Association show that in 2020, the total production capacity of electrolytic copper foil in China will reach 605,000 tons, an increase of 71,000 tons or 13.4% year on year, including 376,000 tons of copper foil for electronic circuits and 229,000 tons of copper foil for lithium electricity. The electrolytic copper foil market is in short supply, and the enterprises are basically in a state of full production. The orders of the enterprises are basically full this year. Demand growth driven by tight supply, stimulate the rapid rise in copper foil processing fees. It is understood that the current electrolytic copper foil processing fee relative to the end of 2020 will increase by an average of nearly 5000 yuan/ton, in which the thickness of 8μm lithium copper foil processing fee of about 35,000 yuan/ton, 6μm processing fee of about 45,000 yuan/ton, 4.5μm processing fee of 75,000 yuan/ton.
At present, the internal and external demand for copper cooling. The U.S. supply chain is seen to be recovering. In the medium term, supply will also increase as chip factories that ordered new machines late last year to boost output bring new capacity online. Given that it takes six to nine months for new machines to be delivered, one month for installation and testing, and two months for new capacity to come offline, this means that global supply of chips will increase by the end of the year. In the longer term, new plants under construction in the U.S. and overseas are about two years away from opening, further boosting global supply to meet fast-growing chip demand.
According to the US inventory indicator, the growth rate of US manufacturing inventories rose to 5.5% year on year in April, back to the highest since 2013, and the inventory adjustment is basically over. In addition, as of April 2021, inventory growth of U.S. manufacturers and wholesalers increased to 3.6% and 5.2%, respectively, returning to pre-epidemic levels, except that inventories of retailers remained negative year on year.
On the one hand, the cooling of domestic demand reflects the seasonally slow season, on the other hand, the manufacturing PMI continued to fall slowly in June. The manufacturing PMI provided further evidence that the peak of the domestic economy had passed. China's manufacturing purchasing managers' index fell 0.1 percentage points to 50.9 per cent in June, remaining above the critical level but slowing expansion for a fourth consecutive month. From the data of the past six years, the current PMI is lower than that of 2017 and 2018, but higher than that of 2019. According to statistics, Shanghai copper active contract closing price and China's official manufacturing PMI showed a positive relationship, and the PMI played a leading role.
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