In mid-December 2020, data show that copper rose 38%, aluminum rose 37%, zinc alloy rose 48%, iron rose 30%, stainless steel surged 45%,, plastic rose 35%. Industry insiders said bluntly, we all buy up not buy down, to a certain high level, that there is room to fall, did not expect prices all the way up.

And now the latest data show that raw material prices continue to go up, the wave of raw material price increases, copper is obviously one of the most concerned in our refrigeration industry.

The core logic of the copper rally

Since entering November 2020, China's civilian consumption sector continued to grow demand and strong exports, tight supply of copper scrap and limited incremental supply of electrolytic copper, resulting in a continuous decline in inventories. And Chile, Peru and other countries to collect the epidemic affected production and transport restrictions, copper concentrates may maintain a tight supply pattern, which has a supportive effect on copper prices.

Industry analysis, from the existing trend of various raw material prices, the short-term is still in a spiral upward channel. On the one hand, due to the impact of the epidemic, overseas mining companies are underemployed, and international logistics are not completely smooth, the supply of raw materials is limited, on the other hand, the downstream demand is more adequate.

Especially after the continued shift of overseas manufacturing orders to China driven by the epidemic, domestic demand for various bulk raw materials continues to be strong, and the contradiction between supply and demand has stimulated the rising prices of raw materials. It is worth mentioning that the appreciation of the RMB is also one of the reasons why raw material prices are climbing higher.

Copper tube processing enterprises call for cautious downstream operation

The dramatic fluctuations and continuous rise in copper prices have increased the risk of business operations and objectively caused an increase in corporate financial costs and pressure.

In 2020, copper pipe processing fees are basically stable, due to the increased vibration of copper prices, processing fees in the total selling price accounted for a relatively low, we focus more on the copper price. Dealers and engineering installation companies are also facing the same problem of risk caused by fluctuations in copper prices, poor operation, and even the risk of bankruptcy. The dramatic fluctuations in copper prices have made it more difficult for customers to operate, and more caution is needed in all aspects of stocking and ordering.

-Source: Refrigeration Business Magazine