Development of China's Copper Plate and Strip Industry--Part II

Development of China's Copper Plate and Strip Industry--Part II

In China, the upstream industries of copper processing are copper ore dressing and copper smelting industries. But China's copper industry has seen unbalanced development between the three steps: copper ore dressing, copper smelting and processing. The industrial pattern where processing capacity is greater than smelting capacity, and smelting capacity is greater than the capacity of mines has been formed. China's copper concentrate supply ability is relatively poor. At present, China is making up for the domestic demand gap by importing various kinds of copper resources in large quantities, increasing mineral exploration investment and opening overseas mines, and has made some achievements. In recent years, the copper smelting industry has developed rapidly because of the rising consumer demand and copper prices. Copper smelting should serve the purpose of meeting domestic demand. The export of copper smelting products is discouraged so as to reduce the processing and trade of such products, and alleviate the conflicts between resources, energy and environment.

China's copper processing industry should continuously meet the needs of downstream consumption areas and coordinate with relevant industries to achieve true transformation and upgrading such as applications in electronic information, transportation and new energy, electric power, military and other aspects.

In the electronic information industry, copper products are mainly used in integrated circuits and semiconductor discrete devices. The lead frames made of high-precision electronic copper strips are mainly used in integrated circuits. Copper-based lead frame strips are mainly used in semiconductor discrete devices. The "Made in China 2025" plan points out that we should focus on making breakthroughs in the new generation of information technology industries, including integrated circuits and special equipment, information and communication equipment, operation systems and industrial software. The next 5 years will be a critical period for the growth of the domestic integrated circuit industry. The industry will gradually grow from a big industry to a strong one, and narrow its technological gap with foreign counterparts. By 2020, the demand for lead frame strips for integrated circuits will still grow by more than 10%.

In recent years, the rapid development of new energy vehicles and the planning and development of electric vehicle charging piles have promoted the demand for copper plates and strips, which are mainly used in electronic connectors. The Guidelines for the Development of Electric Vehicle Charging Infrastructure (2015-2020) state that by 2020, 12,000 centralized charging stations and 4.8 million distributed charging piles will be newly set up in China so as to meet the charging needs of 5 million electric vehicles nationwide. It is expected that by 2020, the growth of new energy vehicles and charging piles will remain above 20%, which will greatly promote market demand for copper plates and strips.

The copper plates and strips for power use are mainly used in transformer strips, and shielding strips of radio frequency cables and power cables and other sectors. Driven by the state's policy on the construction of the power industry, the consumption of transformer strips in China is expected to maintain steady growth in the next few years, between 250,000-300,000 tons. With the popularity of communication networks, the demand for radio frequency cable strips has been on the rise in the past two years, and will remain between 180,000-220,000 tons in the coming years. The demand for power cable strips will be between 120,000-150,000 tons in the next few years.

Copper plate and strip enterprises should actively enter into stable and long-term supply agreements with downstream customers and cooperate on new product research and development in the target markets to ensure the provision of products and services with stable quality and form communities of interests. Second, they should actively approach local governments, strive to attract investment in the vicinity and set up downstream production bases to reduce transportation costs, and realize fast interconnection through the internet of things. Third, they should extend and improve the value-added product chain based on their own conditions to achieve collaborative development and enhance anti-risk ability and profitability.

7 Forecast and analysis of the development trend of copper plates and strips in China

After summarizing and analyzing the current operation status of China's copper plate and strip industry, we can speculate that the future trend of technology development in this industry is as follows:

From the perspective of scale, the copper plate and strip industry is developing towards a large-scale and specialized industry. The copper processing industry will be further concentrated in the Yangtze River Delta, the Pearl River Delta and the southeast coastal areas. Key raw materials distribution centers may become new copper processing industry bases. A new round of mergers and reorganizations will take place among copper processing and production enterprises, and the concentration and modernization of the industry will be further improved.

From the perspective of materials, alloy materials will develop towards high purification, micro-alloying, high strength, high conductivity, and multiple functions.

From the perspective of products, copper plates and strips will develop towards functional integration, serialization, high precision, high quality and high stability. Domestic copper plate and strip processing enterprises will pay more attention to technological innovation and the promotion and application of new technologies, attach importance to the development of new products, especially high-tech products with a short development cycle and a short upgrading and replacement cycle, basically implement the "applications of product A, technical reserves for product B and research of product C" system and use it as a new economic growth point. Product specifications will develop towards large length, high performance, thinning, broadening, economy, energy conservation and environmental protection.

From the perspective of production technology, the copper plate and strip industry will develop towards refinement, high efficiency, low cost, low energy consumption, short process and cleanliness. With China's economic transition to low speed, energy conservation and environmental protection, the copper plate and strip processing industry will also enter the era of low-profit operations and lean management. The transformation and upgrading of the copper plate and strip industry is inevitable. Only through technological innovation and lean management can the sustained and stable development of China's copper plate and strip processing industry be ensured.

From the perspective of internal management, copper processing enterprises will further refine their internal management processes, and establish a modern lean management system with the goal of strengthening product quality, vigorously developing characteristic products and improving the added value of products. After rapid expansion, China's copper plate and strip industry will effectively improve technical equipment, product quality and its overall level. However, facing problems such as periodic overcapacity and product homogenization is inevitable in achieving industrial upgrading. Only those enterprises with core technologies and clear market positioning will be able to stand out in the future competitive industry characterized by large scale and differentiation.

8 Risk analysis of copper plate and strip investment in China

At present, copper and copper alloy plates and strips are rapidly developing towards high precision, high quality, high surface quality, thinning and high performances. Significant changes have been made to alloy varieties and key production technologies. Therefore, plate and strip investment must be based on current technical development and investor's situation. Investment costs and market demand shall be combined to make reasonable choices in terms of product, scale and technical equipment and develop distinctive advantages in the specialized production of alloy varieties. Only in this way can we avoid the competition brought by the copper plate and strip investment boom and truly improve the technical level of high-precision copper and copper alloy plates and strips in China.

For the moment, the ordinary copper plate and strip market in our country is close to saturation, while the high-precision copper plate and strip market still has a gap to fill. High-precision copper plates and strips are improving in terms of production technology and overall quality, and a large number of copper and copper alloy plate and strip materials and varieties for professional applications are emerging. These are important trends in the development of high-precision copper plate and strip varieties and production technologies around the world as well as important benchmarks for China's copper plate and strip production enterprises to develop a correct market positioning strategy and make technology, process and equipment choices. Our country has lagged behind Japan, Germany and other countries in the research and development and production technology of some high-end copper plates and strips, and it's hard to make breakthroughs in a short period of time. Based on the current development status of our copper plate and strip industry, it's expected that the domestic high-precision copper plate and strip market will still have a gap of 100,000-200,000 tons in the next 5 years. Therefore, high-precision copper plate and strip enterprises will continue to study, develop, transform and upgrade their production technologies according to the needs of downstream users, which will also provide a broad market for high-precision copper plates and strips. The enterprises shall accurately position their products, select high-precision processes and technologies, shorten the process flow, and give play to the effect of energy conservation and consumption reduction. Only by achieving professionalism on the micro level can they become stronger and bigger. This is the only way for copper plate and strip enterprises to develop healthily and prosper.