The impact of large fluctuations in copper prices on the wire and cable industry

Keywords: copper price, wire and cable, influence

Recently, copper prices have been falling for days, from around RMB75,000/ton to RMB63,000/ton, a drop of nearly 16%. So will this affect cable prices? The answer is yes, because copper is the largest part of the cost of the raw materials required for cables.

The wire and cable industry is an industry that relies heavily on raw materials, especially the dependence on copper has never changed over the years. As we all know, the high price of copper, coupled with the special order and contract issues in the cable industry, cause copper prices to increase or decrease, which is unfavorable for wire and cable manufacturers.

In the cable industry, whether it is copper or aluminum, both constitute the main raw materials of the wire and cable industry. According to relevant statistics, the copper used in wire and cable accounts for about 60-70% of the national copper consumption. The amount of copper used in cable products is roughly: power cables account for about 20-30%, electrical equipment wires and cables account for about 28-30%, winding wires account for about 26-29%, communication cables account for about 5-7%, Other cables account for about 4-5%.

With the development in recent years, China’s domestic wire and cable manufacturers are under heavy cost pressure, because copper, aluminum, plastic and other raw materials account for more than 80% of the cost of wire and cable, plus energy prices, transportation costs and The rising cost of human resources has made these enterprises even worse. In recent years, due to the soaring market price of copper ingots in the world, the cost of domestic wires and cables has skyrocketed, and almost all cable companies are facing a serious cost crisis.

So, is the opportunity of the copper price falling rapidly and then rising again, is it the best time to purchase?