1. The main application areas of copper alloy rods

Copper bars can be divided into pure copper bars and copper alloy bars according to their materials, and copper alloy bars are further divided into brass bars, white copper bars, and bronze bars. Brass is a copper alloy with zinc as the main auxiliary element, white copper is a copper alloy with nickel as the main auxiliary element, and bronze is a copper alloy with elements other than zinc and nickel as auxiliary elements. From the perspective of production process and technology, copper alloy rods can be divided into ordinary copper alloy rods, precision copper alloy rods, and high-performance copper alloy rods. Precision copper alloy bars mainly refer to alloy bars with uniform chemical composition, metallographic structure, and mechanical properties, high dimensional accuracy, excellent bar shape, and suitable for deep processing on high-speed CNC lathes between single bars or even batches of bars; High performance copper alloy rods refer to alloy rods with special properties such as high strength, high conductivity, high wear resistance, environmental protection, and energy saving. Copper alloy bars, as basic industrial materials, are widely used in various industries. In 2017, about 38% of the domestic copper bar consumption was used in the hardware industry such as plumbing and bathroom, locks, etc. The consumption in the home appliance industry accounted for about 22%, the transportation industry accounted for about 18%, and the electronic communication and IT industry accounted for about 20%.

2. Overview of the Chinese Copper Alloy Rod Market

According to relevant big data statistics, in the production of copper bars in China in 2017, pure copper bars accounted for about 10% and copper alloy bars accounted for about 90%. Domestic copper alloy rods are mainly ordinary brass rods, while the rest are precision copper alloy rods, environmentally friendly copper alloy rods, high-strength and high conductivity copper alloy rods and other high-performance copper alloy rods. In the past decade, the average annual growth rates of precision copper alloy rods and high-performance copper alloy rods have been 15.3% and 18.2%, respectively, far higher than the overall production growth rate of copper rods and copper alloy rods during the same period. The proportion of their production to copper alloy rods has increased from 47.4% in 2016 to 48.9% in 2017. In 2017, the production of precision copper alloy rods and high-performance copper alloy rods further broke through historical highs, increasing from 381000 tons in 2016 to 454000 tons in 2017, indicating a significant adjustment in the industry's product structure. In the past five years, the consumption of copper bars and copper alloy bars in China has remained stable with a slight decrease. However, the consumption of precision copper alloy bars and high-performance copper alloy bars has continued to grow rapidly, with an average annual growth rate of 9.4% and 5.6% respectively. The proportion of apparent consumption of copper alloy bars has also increased from 47.4% in 2016 to 53.1% in 2017, while the consumption proportion of ordinary brass bars has decreased to 46.9% during the same period.

Due to the low market positioning of most domestic copper processing enterprises, since 2005, when copper prices have continued to rise, downstream industries have chosen alternative materials such as zinc and aluminum in some low-end product areas under cost pressure, resulting in a steady decline in overall consumption in the copper bar industry. In addition, the increasing awareness of environmental protection in society and the increasingly strict implementation of environmental standards have led to inadequate preparation and insufficient effective supply for most domestic enterprises, which is also the reason for the decline in the apparent consumption of copper bars in China. However, the adjustment of China's industrial structure and the improvement of social living standards have led to sustained growth in demand for high-end products such as precision copper alloy rods and high-performance copper alloy rods. For many years, there has been a situation of supply shortage in the Chinese copper rod market, where the output is less than the apparent consumption, and the supply-demand gap needs to be filled by imports.

During the past decade, China has imported approximately 100000 tons of copper rods annually, accounting for about 15% of the country's apparent consumption. The main imported varieties are precision copper rods and high-performance copper rods, accounting for a total of 95.16% of net copper rod imports in 2017, up from 90.23% in 2008. In terms of trade mode, the import of copper bars in China is mainly based on processing trade. In 2017, copper bars imported through import processing and processing trade accounted for 88% of the total imports, followed by bonded zone transit trade and general trade; From the perspective of import regions, the provinces with the largest import volume of copper bars are Guangdong, Jiangsu, and Fujian. The total import volume of copper bars in the three provinces accounts for 86.20% of the total, with Guangdong Province alone accounting for 62% of the import volume; From the perspective of importing countries and regions, 85000 tons of copper bars were imported from South Korea, Taiwan, and Japan, accounting for 85% of the total imports. The net import volume of copper bars has shown an overall downward trend year by year. On the one hand, domestic copper processing enterprises have replaced some imported products with improved product quality; On the other hand, some international manufacturers have established wholly-owned or joint ventures in China to produce copper alloy products. Taking China's continuous net export of copper pipes as an example, it also experienced initial net imports, and then with the improvement of domestic technology and product quality, the products have gained international market competitiveness and achieved net exports. At present, China's copper rod products are still in a net import state, indicating that there is still significant room for improvement in the quality and market prospects of copper rod products. Antaike expects that the sustained growth of the Chinese economy, as well as the rapid development of industries such as real estate, transportation, and electronic communication, will enable the copper rod industry to maintain stable growth in the future.

3. Relevance with downstream industries

Copper alloy rod and wire products have a wide range of applications and involve many downstream industries, such as the IT industry, electronic communication industry, aerospace industry, hardware industry, air conditioning and refrigeration parts industry, etc. Their output to the industry is reflected in the direct demand for copper alloy rod and wire products, so they are closely related to the copper alloy rod industry.

4. The favorable and unfavorable impacts of the development status of major downstream industries on the industry and its development prospects

(1) The overall demand for copper alloy rods and wires in downstream industries is showing a stable growth trend

The downstream industries of copper alloy rod and wire include IT, electronic communication, aerospace, military, hardware, home appliances and many other industries. These industries are not only the leading industries of China's national economy, but also industries with strong competitiveness in the international market. At present, China is the country with the largest production of high-tech products such as computers and mobile phones in the world. In 2017, it produced 354 million computers and 1.9 billion mobile phones, both accounting for more than half of the world's production and still maintaining stable growth.

(2) The development of downstream industries has put forward new requirements for copper alloy rods and wires

① The development trend of industrial automation and standardization: Standardization, automation, and high efficiency in production are inherent trends in industry. With the widespread use of high-speed machine tools and automated production equipment in downstream industries, copper alloy rods and wires required for production must achieve higher precision to meet the requirements of automated production. Therefore, the demand for precision copper rods will continue to grow steadily.

② The increasingly strict environmental requirements are accompanied by the improvement of living standards and the growing awareness of environmental protection in society. The World Health Organization's "Guidelines for Drinking Water Quality (3rd edition)" recommend that countries limit the maximum lead content in drinking water to 0.01mg/L and replace water supply equipment containing lead. The EU ROHS and WEEE directives stipulate that since July 1, 2006, electronic products containing lead are not allowed to be produced and sold in the EU region, and production and import are illegal. Japan, Germany, the United States and other countries have also established mandatory regulations on lead content in drinking water, electronic products, etc. China has also formulated regulations in the areas of drinking water and electronic information products, such as the "Chinese Sanitary Standards for Drinking Water (2006 Edition)" which reduces the maximum lead content in drinking water from 0.05mg/L to 0.01mg/L; The Management Measures for Pollution Control of Electronic Information Products stipulate that electronic information products listed in its catalog shall not contain toxic and harmful substances such as lead and mercury, and require manufacturers to take measures to improve and enhance them. China is the world's second largest exporter, and the trend of lead-free development at home and abroad will directly drive the market demand for environmentally friendly copper alloy products, providing broad development space for leading domestic research and production enterprises of lead-free brass alloy materials.

③ The development of high-tech industries such as domestic equipment manufacturing, aerospace, electronic information, as well as emerging industries such as high-speed rail transit, has put forward new requirements for copper alloy products. The national industrial policies such as the "Adjustment and Revitalization Plan for Nonferrous Metals Industry" and the "Eleventh Five Year Plan for Scientific and Technological Development" of the Ministry of Science and Technology provide guidance for research in the fields of basic materials, new materials, etc., encouraging the development of lightweight and high-strength metals, high-performance metal composite materials and preparation technologies, and continuously meeting the "high, precision, cutting-edge, and new" product demands of downstream industries.

Article source: Internet

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