China has the largest demand for copper, accounting for more than 50% of the global consumption, but its resources are limited and it relies heavily on imports. Judging from the global copper production of 20 19, China only accounts for 8%, and nearly 40% of the production is exported by Chile and Peru in South America. This round of soaring prices has seriously affected the copper processing industry and the downstream small and medium-sized players who use copper as raw materials.
Copper is an important raw material for home appliance industry. According to industry insiders, raw materials generally rose by more than 30% this year, which directly lowered the gross profit margin. A large number of small and medium-sized players dare not take orders for fear of losing their blood.
Small and medium-sized enterprises have a hard time, and the relevant state departments have quickly spoken. A meeting was held on May 12, and it was once again mentioned that we should do a good job in market regulation and control to deal with the excessive rise in commodity prices and its impact. This is the fourth time that commodity prices have been mentioned at national high-level meetings and ministerial meetings since April.
The soaring copper prices reflect that China is still subject to international pricing power. Because of its dependence on imports, copper prices basically depend on the international market. Although Shanghai copper futures has great influence in China, it only affects domestic copper trading. The pricing of international copper products is mainly based on London Metal Exchange (LME).