The poor life of cable industry become more worse for the price of copper rise up this year
2021-10-21
Wire and cable industry is an industry relies heavily on raw material: copper, aluminum and plastic account for 80% of the total cost. This year, wage rise up, freight rise up, plus the price of raw material especially copper rise up make the poor life of cable industry more worse!
Yesterday, the peak of copper price was RMB 76,700 each ton! For the reasons, we think there are three factors:
1) COVID-19 make it difficult for workers around the world.
In Chile, the less copper production caused with miners can not work for COVID-19 resulted in price rising of copper futures.
2) The money liquidity is very loose, currency inflation are strongly expected.
The Federal Reserve launched QE make currency market around the world flooded then push the price of nonferrous metals promoted.
3) The development of new energy vehicles make the cooper demand greatly increased.
In 2006, the price of copper headed the peak of RMB 85,550 then the big depression occured in 2008 as we already knew. But this year, things different cause the physical requirement from NEVs.
We think the price maybe will go down the following year as Taper of the Federal Reserve is carried out, but not too much, the price of copper futures probably would remain high for long time.
Anyway, It is quite bad news for wire and cable industry! In SINETECH, we had had to promote the price of all the cables already, covered our USB cable, D-sub cable, Powered USB cable, network cable and so on. Fortunately, our clients especially regular clients understood this is the hard situation we need cooperate with everyone shoulders to shoulders!
