The ongoing trade war between the United States and China has yet to show any signs of easing. The two sides are facing a standoff and are burning towards Chinese telecommunications giant Huawei, deepening the uncertainty faced by the electronics industry. The latest international copper spot price has also dropped to $5822 per metric ton, the second lowest this year. For PCB manufacturers, this shows a wait-and-see attitude towards demand in the second half of this year, and they have a conservative view on inventory preparation.
From the fourth quarter of last year to the first quarter of this year, the upstream raw material industry of PCB showed a significant decrease in their willingness to reserve inventory for customers, and their revenue also showed signs of fatigue. In the first quarter of this year, including CCL factories Taiwan Optoelectronics, Lianmao, and Taiyao, their revenue declined compared to the same period last year, indicating that PCB factories have not had a high willingness to replenish inventory upstream this year.
According to the analysis of the supervisor of a large PCB factory, the changes in the upstream raw material market for PCBs, in addition to responding to the uncertainty caused by the US China trade war, further decline in international copper prices, indicate that CCL and PCB factories are unwilling to pile up more inventory at this time. It is estimated that this impact will become more severe in June.
The international copper price fell by 6.3% in May, with the latest price falling to $5822 per metric ton, the second lowest of the year. The significance of this includes two aspects: firstly, the global economic recession has caused a decline in demand for laying wires and cables in infrastructure construction, and secondly, it reflects a decrease in demand for related copper foil and copper foil substrates from PCB factories, resulting in a sluggish overall growth momentum of the PCB industry.
The same impact has also been confirmed in the upstream fiberglass industry of PCB. In May, Fuqiao's electronic grade fiberglass fabric orders were weak, and since the second half of last year, the electronic industry market has not developed well. Fuqiao had already planned for this, including industrial grade fiberglass yarn products, and signed long-term supply contracts with European customers next year to ensure product shipments are safe and to maintain the company's profitability in an unfavorable environment.
The worsening of the US China trade war has led to a rapid increase in market uncertainty. Although PCB manufacturers are cautious in responding to market changes and their outlook on the economy is also cautious and optimistic, demand is weak. In order to maintain the utilization rate of newly opened production capacity in the second half of the year, CCL and PCB manufacturers are facing a wave of price cutting and order grabbing, and the trend of international copper prices is an important indicator of the economy.
(Source of article: Juheng.com)
