Recently, the price of raw materials has risen further. As of April 22, LME copper had reached 9,814 US dollars/ton, up more than 16% from the beginning of the year. At the same time, companies such as China Jushi also further raised the price of glass fiber.
The Zhitong Finance App learned that Dongguan Securities released a research report saying that raw material prices have risen further recently. As of April 22, LME copper had reached 9,814 US dollars/ton, up more than 16% from the beginning of the year. At the same time, companies such as China Jushi also further raised glass fiber prices. On the demand side, the overall boom of PCB manufacturers in Q1 has improved, and demand in the AI field is still strong. Driven by rising raw material prices and improving downstream sentiment, several copper-clad plate companies began a new cycle of price increases. Among them, Jiantao Laminate issued a price increase letter on March 19, increasing the price of all products by 10 yuan/sheet. As the price of copper-clad sheets rises further, the performance flexibility of related companies is expected to be unleashed. Related targets include Jiantao Laminate (01888), Huazheng New Materials (603186.SH), and Nanya New Materials (688519.SH).
Copper clad plate is the main material for PCBs. Looking at the industrial chain, the upstream PCB is the raw materials required for production, while the downstream is in terminal fields such as communications, consumer electronics, automotive electronics, and home appliances. Judging from the composition of operating costs, direct materials account for the highest share. In Welgau as an example, direct materials accounted for 62.91% of operating costs in 2022. The direct materials are mainly copper-clad sheets, while copper-clad sheets are mainly composed of materials such as copper foil, glass fiber, epoxy resin, etc., accounting for 42.1%, 26.1%, and 19.1% of the cost, respectively. Therefore, price fluctuations in copper prices, glass fiber, and epoxy resin will directly affect the production costs of CCL and PCB.
Copper clad plate manufacturers have strong bargaining power, and the cost pressure is passed on to PCB manufacturers. Dongguan Securities pointed out that in the past ten years, the copper-clad plate industry has mainly experienced a two-round upward cycle of 2016-2017 and 2020-2021, mainly driven by rising raw material prices and strong demand for terminals. Among them, in 2020-2021, the highest price of LME copper was close to 10,800 US dollars/ton, up more than 130% from the low in early 2020, while the highest price of epoxy resin was over 40,000 yuan/ton, up 155% from the low level in early 2020. Faced with a sharp rise in raw material prices, the copper-clad plate industry has transferred cost pressure to PCB manufacturers through multiple price increases due to the relatively concentrated competitive pattern.
Risk warning: terminal demand recovery falls short of expectations; market competition intensifies, etc.