Printed circuit PCB copper foil demand and supply overturned cause the price cycle.
As an important electronic connector, the Printed circuit PCB is used almost exclusively on all electronic products and is considered the “mother of electronic system products”. GF Securities believes that the upstream copper foil capacity is estrus by lithium which caused the demand and supply overturned, and gradually conduct to the downstream, driving the PCB industry chain into the price cycle.
PCB copper foil demand and supply overturned cause the price cycle
The industrial chain from top to bottom is “raw materials – CCL-PCB production“, the industry concentration of the upper and middle reaches raw materials, copper coil and copper clad laminate is high, and with power bargaining, although the whole PCB industry is scattered, but the superior manufacturer who focus on high-end products with High bargaining power.
In China ,the new energy vehicles brings the short supply of the lithium copper foil, it is the first price increasing; then the high-pressure lithium copper foil attract the foil manufacturers to convert production, overseas production capacity transfers some of the standard foil production capacity, the standard foil supply tightening and the price is increasing. The lithium copper Foil and standard foil processing fees increased alternately and along the industry chain come to the middle of the tour, CCL manufacturers repeatedly take the initiative to raise prices, FR4, resin and other raw materials have followed up; the downstream Printed circuit PCB manufacturers have to increase costs accordingly, so the upstream copper prices trigger the entire industry chain, Printed circuit PCB price increase cycle comeback.
The printed circuit board industry will accelerate integration
Due to capital investment, staff reserves, environmental impact assessment and other barriers to restrictions, it is difficult for copper manufacturers to build the new capacity, the core production equipment depends on importing led to the release of new capacity takes a long time. At the same time the majority of the ongoing expansion plans cannot be put into operation recently, the situation of copper supply is tight, although partial easing, but difficult to fundamentally reversed, estimated the nervous supply situation will last to the end of 2017.
In addition, the price of the fiberglass cloth and resin increased crazy recently because of the reforming, routine shutdown maintenance and other effects, and the price cycle continued in the first half of the year.
For the upstream copper foil and the midstream CCL manufacturers, will benefit from the high performance flexibility which brined by the high bargaining power, as long as the price cycle continues, the upstream manufacturers will maximize the power for profit; for the downstream PCB, the logic of electronic growth Never out of date, they need to find the superior manufacturer in the price cycle and find the opportunity to grow strong in the industry integration.
