Current copper price market situation
On October 21, 2025, the main copper contract in Shanghai closed at 85380 yuan/ton, an increase of 620 yuan/ton or 0.73% from the previous day. The scrap copper recycling market is also showing an upward trend, with an average scrap copper recycling price of 78320 yuan/ton in 20 major cities across the country, an increase of 630 yuan/ton or 0.81% from the previous day, slightly higher than the increase in refined copper futures. The prices of high-purity waste materials such as # bright copper wire and purple copper blocks are concentrated in the range of 78300-78470 yuan/ton, while the prices of low purity varieties such as purple miscellaneous copper and burnt wire fluctuate in the range of 78030-78300 yuan/ton.
From the perspective of regional markets, Central China has shown the strongest performance, with Zhoukou in Henan leading the country with a recycling price of 78470 yuan/ton, an increase of 660 yuan/ton; The price of "light copper wire and fire burned wire" in Wenzhou, Zhejiang is 78440 yuan/ton, an increase of 650 yuan/ton. As the core area of copper consumption in southern China, the price elasticity is significant. The recycling price of # copper in Shenzhen, Guangdong is 78340 yuan/ton, an increase of 680 yuan/ton, which is higher than the main copper price increase in Shanghai.
The proportion of copper in the production cost of wires and cables
Copper, as the main raw material for wire and cable production, directly affects the overall profit level of the industry in terms of its cost proportion. According to industry analysis, copper and aluminum are the main materials for cable conductors, accounting for over 60% of the raw materials. From the overall cost structure, raw material costs account for about 71% of the total production cost of wires and cables, with copper being the main component; The labor cost accounts for about 14%, the facility cost accounts for about 10%, and the electricity cost accounts for about 5%.
This high proportion of material cost structure makes the wire and cable industry extremely sensitive to copper price fluctuations. Based on the copper price on October 21, 2025, if a medium-sized cable enterprise uses 100 tons of copper material per month, for every 1000 yuan/ton increase in copper price, the monthly raw material cost of the enterprise will increase by 100000 yuan, with an annualized impact of 1.2 million yuan. This cost pressure will directly transmit to the profit margin of the enterprise, causing a significant impact on profitability.
The impact mechanism of copper price fluctuations on industry costs
The fluctuation of copper prices affects the cost structure and market competitiveness of the wire and cable industry through various channels:
Direct cost transmission: The rise in copper prices directly increases the raw material procurement costs of enterprises. When copper prices rise, companies may adopt a strategy of raising product prices in order to maintain profits. However, this may lead to a decrease in demand from some customers, as higher prices may prompt some customers to seek alternatives or reduce their procurement volume.
Inventory management pressure: Fluctuations in copper prices pose challenges to inventory management for cable companies. If a company hoards a large amount of goods when copper prices are low, although it can reduce subsequent procurement costs, it may face the risk of inventory backlog, occupy a large amount of funds, and also need to bear inventory storage costs. On the contrary, if a company has insufficient inventory before copper prices rise, it may lead to production interruption and inability to meet customer order demands in a timely manner.
Changes in market competition pattern: Fluctuations in copper prices will intensify competition in the cable market. Enterprises with strong cost control capabilities and the ability to effectively respond to copper price fluctuations have a greater advantage in market competition. They can reduce costs by optimizing production processes, adjusting product structures reasonably, or being more flexible in pricing, thereby attracting more customers.
Strategies for Addressing Copper Price Volatility
Faced with the challenges brought by copper price fluctuations, the wire and cable industry has formed multi-level response strategies:
Financial instrument application: Hedging has become the mainstream risk management tool in the industry. By locking in future copper procurement prices through the futures market, companies can effectively avoid price volatility risks. For example, listed companies such as Qifan Cable actively use hedging methods to hedge against fluctuations in raw material costs.
Supply chain optimization: Establish stable raw material supply channels, sign long-term agreements with copper suppliers, and ensure relatively stable prices. At the same time, strengthen inventory management, establish a scientific inventory warning mechanism, and avoid inventory backlog or shortage caused by price fluctuations.
Product structure adjustment: Develop high value-added products, improve product premium ability, and offset the impact of rising raw material costs. Some companies are also developing copper substitute materials, such as using aluminum conductors instead of copper conductors in certain product lines to reduce dependence on copper.
Cost control enhancement: Reduce copper consumption per unit product through lean production, process improvement, and other methods. For example, optimizing the conductor twisting process to improve the utilization rate of copper materials; Improve the formula of insulation materials and reduce the amount of copper used.
Market monitoring system: Establish a professional team to track the trend of copper prices, analyze influencing factors, predict price trends, and provide a basis for decision-making. Some large enterprises have also established copper price warning systems, which automatically trigger response mechanisms when price fluctuations exceed a set threshold.
Future Development Trends
Technical upgrade:
- High voltage/ultra-high voltage cable technology has a high threshold, and leading enterprises consolidate their advantages through patent layout.
- Driven by technology in the field of special cables, there has been an explosion in segmented tracks, such as industrial robot optical cables with a bending life of over 10 million times.
- Application of new materials: Increase the permeability of high-temperature resistant insulation materials such as silicone rubber and cross-linked polyethylene.
Market opportunities:
- In the field of new energy, the market size of high-voltage cables for new energy vehicles is rapidly growing, and liquid cooled cables for charging piles have become a new growth point.
- New infrastructure: State Grid's investment in 2025 will exceed 650 billion yuan, driving demand for high-voltage and ultra high voltage cables.
- Globalization layout: enterprises accelerate overseas market expansion, especially in countries along the "the Belt and Road".
Industry Transformation:
- Develop towards the direction of "high-end, intelligent, and green".
- Green production: lead-free solder, water-based coatings and other processes are popularized, and the recycling rate of waste cables is increased.
- Intelligent manufacturing: improving efficiency and quality through automation and information technology.
