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How does the price of copper-clad plate affect PCB manufactures


The price of raw materials fell

Since March and April, the unit price of commodities continue to go down, copper, aluminum and other precious metal futures prices also continued to plummet, which also gives many raw materials are precious metals to reduce the production pressure of enterprises, especially copper clad, PCB and other manufacturers.


And the reduction in the cost of raw materials end, will also contribute to the enterprise’s gross margin can be improved.

As enters the window period of the half-yearly report, many companies have increased half-yearly performance forecast and half-yearly report data. Copper-clad manufacturers and PCB manufacturers of financial data appeared two levels of divergence, in which the net profit of copper-clad manufacturers generally declined, while the majority of PCB manufacturers have improved their performance significantly.

Laminate volume and price decline

As we all know, commodity futures in 2021 all the way up, and many varieties of prices in the last year hit a record high, can be described as a rare bull market in commodities for several years. However, copper, aluminum, etc. is one of the main raw materials for many traditional manufacturing industries, the surge in futures prices, making such enterprises production costs have risen significantly.

Copper, for example, one of the core raw materials required for the production of copper-clad plates is copper foil, accounting for 30%-50% of the cost of copper-clad plates, and the high price of copper, copper-clad manufacturers directly to the production costs under pressure.

However, the good in the laminate industry concentration is higher, the concentration of high-end products is higher, the laminate manufacturers of downstream bargaining power is stronger, therefore, last year to build Tao laminate led by the major laminate manufacturers have taken the opportunity to raise prices, not only the smooth transfer of costs to downstream PCB manufacturers and in the tide of price increases are very profitable.

However, this situation has reversed in the fourth quarter of last year, on the one hand, the major raw material prices such as copper prices stabilized, epoxy resin prices fell sharply, on the other hand, under the influence of the industry cycle, the price of copper clad board appeared natural fall.


This situation is more apparent in the first half of this year, copper prices in April hit a new stage high after a continuous plunge, as of August 5, LME copper prices have fallen back to the level in June last year. It is currently in a shock consolidation, but according to market expectations, LME copper may have a tendency to go further down.

Plummeting prices of raw materials, so that copper-clad manufacturers are greatly injured, how beautiful last year, this year will be how miserable. According to the disclosed results of the report, without exception, there is a significant decline in net profit scenes.

First of all, the laminate leader Kingboard expects to make a net profit of approximately HK$1.7 billion to HK$2 billion for the six months ending June 30, 2022, a decrease of approximately 40% to 49% compared to the same period last year. This is mainly due to the decline in sales volume and unit price of the Group’s copper-clad panels.

Jinan Guoji expects net profit of 55 million yuan – 80 million yuan in the first half of 2022, down 85.35% – 89.93% year-on-year. The company said that the industry market boom decline, the company’s copper-clad panel product sales and product prices are down more year-on-year, resulting in a higher year-on-year decline in the gross profit margin of the product.

Nanya New Material Technology half-yearly data show that revenue, net profit double decline, the company achieved operating income of 1.877 billion yuan in the first half of the year, a decrease of 5.82%, net profit of 82.895 million yuan, a decrease of 62.36%. And the reason for the decline in performance, and the above two appear the same situation, Nanya New Material Technology , said the industry market downturn, downstream end market demand is less than expected, the company’s product unit price and sales decreased year-on-year.

PCB performance improved significantly


Laminate volume and price, that the downstream PCB manufacturers are significantly benefited, after all, PCB’s main core raw material is the laminate, therefore, last year, a number of PCB manufacturers in the face of laminate price increases, suffering, net profit, gross profit margin plummeted.

And this year, PCB manufacturers have significantly improved gross margins, before the set of micro network has been analyzed, more than half of the PCB companies in the first quarter of this year, gross margins have improved in the ring.

Here it should be noted that the first quarter when copper prices have not yet begun to plummet, the LME copper prices really plummeted in the second quarter, a single quarter drop of more than 20%, that is, the gross profit margin level of PCB manufacturers in the second quarter than the first quarter to a higher level.

From the disclosed half-yearly financial data of Kinwong and FSQuality will be able to corroborate with the above views. Among them, Kinwong achieved a net profit of 465 million RMB in the first half of the year, an increase of 0.64%, but the company achieved a net profit of 296 million RMB in the second quarter, an increase of 43.24% year-on-year, an increase of 65.92%; gross margin of 21.96%, an increase of 2.46%.

FSQuality achieved a net profit of 97.2130 million RMB in the first half of the year, an increase of 16.42% year-on-year. Among them, the second quarter achieved a net profit of 62,458,000 RMB, an increase of 34.74% year-on-year, an increase of 65.9% sequentially.



It is not difficult to find, PCB manufacturers and laminate manufacturers’ performance in the second quarter of this year began to appear in the opposite direction. In this regard, Kinwong said that the first half of this year, the overall trend of bulk raw material prices downward to alleviate some of the cost pressure. Due to the impact of the inventory cycle, the company’s cost side pressure since March gradually released.

In addition, Avary Holding, Shiyun circuit,Ellington Electronics has also reported positive results in this year’s interim report.

Among them, Avary Holding first-half net profit of about 1.393 billion RMB – 1.457 billion RMB, an increase of 120% -130%; FSQuality circuit first-half net profit of 120 million RMB to 150 million yuan, an increase of 55.89% to 85.28%; ,Ellington electronics to achieve net profit of 116 million RMB to 130 million RMB, an increase of 55.56% to 74.33%.

The reason, the three companies said, mainly due to the decline in raw material prices, production costs have been reduced, product selling prices, comprehensive gross margin improvement.

PCB makers, said the person in charge: “raw materials, from February this year, on the price cuts one after another. For example, copper foil, copper plate and epoxy resin these raw materials on our impact is relatively large, the current price reduction has returned to the lowest point last year, the pressure on our rising costs is a certain relief.”

“Copper clad board this year, the price reduction of about 30%, but the downstream customers are also asking for price reductions, the back of the main or see how customers adjust product prices.” The head of the manufacturer added, but now the control of the epidemic gradually relaxed, there are also some stimulus policies out, so for the second half of the market, we are still relatively optimistic.



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