Early 2026: As global commodity prices continue to climb, domestic copper prices have surged from under CNY70,000 per ton at the start of last year to over CNY 100,000 per ton—a nearly 50% increase. The power equipment industry, traditionally reliant on copper as its core conductor material, is undergoing profound transformation. The trend of “aluminum replacing copper” is rapidly spreading across new energy power engineering projects.

Industry insiders indicate that aluminum alloy cables now account for 60-70% of new small-to-medium charging stations, while transformers are also shifting toward all-aluminum replacements. This transition stems not from technological advancement but from cost pressures.

Rising Copper Prices Eroding Industry Profits, Forcing Power Equipment Manufacturers to Adjust Prices

The sustained copper price surge is squeezing profit margins for electrical equipment manufacturers.

From 2024 to the first half of 2025, copper prices generally hovered between 60,000 and 70,000 yuan per ton, while aluminum prices remained around CNY 20,000 per ton. Currently, market copper prices have surpassed CNY 100,000 per ton—a nearly 50% increase—while aluminum prices have only slightly risen to approximately CNY 25,000 per ton. The price gap between the two metals has more than doubled.

For power equipment manufacturers operating on order-based production and fixed-price models, raw material price fluctuations directly impact profitability. A representative from Bao Bi Electric (600550.SH) told Press that most of the company's products are custom-made to order, with prices locked in at the time of customer order placement. Subsequent fluctuations in raw materials like copper directly affect the profit margin per unit. Kerun Intelligent Control (920062.BJ) also noted in its earnings forecast that elevated and fluctuating prices of core raw materials like copper have imposed rigid cost pressures on its products, weighing on overall performance.

Under mounting cost pressures, some companies have begun adjusting product pricing. Tianzheng Electric (605066.SH) recently notified select customer groups that effective January 29, it would moderately raise prices for certain models of circuit breakers, industrial control equipment, and medium-voltage products containing key raw materials like copper and silver. Price increases range from 3% to 50%. A distributor informed press that the company did indeed implement price adjustments on the 29th, with most products seeing increases of around 30%.

For companies employing floating pricing mechanisms, another challenge arises: frequent price adjustments complicate customer communication and may even impact order acquisition.

In the cable industry, where raw material costs constitute a significant portion of expenses, intense market competition, and high price transparency, corporate profit margins are already slim, making them particularly sensitive to copper price fluctuations. Yan, manager at Hebei Qijun Cable Co., Ltd., noted that copper prices remained stable around CNY 70,000 per ton until October 2025. However, since November, continuous price hikes have driven cable price increases. “Under current market conditions, every 1,000 yuan per ton increase in copper prices translates to roughly a 1% rise in cable prices.”

Most cable manufacturers have now established dynamic pricing mechanisms tied to copper prices. For example, Zhonglian Cable Group Co., Ltd.'s ZC-YJV22-4×120+1×70 model cable was quoted at CNY 542 per meter on January 24, explicitly stating that this price was calculated based on a Shanghai Nonferrous Metals Exchange copper price of CNY 100,000 per ton. For every CNY 900 per ton fluctuation in copper prices, the product unit price would correspondingly adjust by ±1%.

Although elevated copper prices have imposed significant cost pressures on downstream manufacturing, a near-term decline appears unlikely. Zeng Jianhui, an analyst at Shanghai Steel Union (300226.SZ) Copper Division, told Cailian Press that this round of copper price surges stems primarily from three factors: First, supply-side disruptions provide upward support, with tight global refined copper supply and persistently declining treatment charges (TC); Second, robust demand resilience, with steady consumption in traditional sectors coupled with strong expectations for copper usage in emerging fields like new energy, AI, and electrification. Third, heightened geopolitical tensions fueling market risk aversion, driving up precious metal prices and indirectly reinforcing copper's financial and safe-haven attributes.

Zeng Jianhui predicts, “Copper prices will maintain an overall upward trajectory through 2026 and beyond. Even if short-term corrections occur, the fundamental pattern of ‘short-term weakness, long-term strength’ remains unchanged.”

Significant Increase in “Aluminum Substituting Copper” at Small-to-Medium Charging Stations

Persistently high copper prices continue to exert pressure, driving up costs for related power equipment. Small-to-medium charging stations are now achieving cost reductions and efficiency gains through material substitution.

“The lowest factory price for a 400kVA copper-core transformer this year is CNY 58,000 per unit, about 20% higher than the same period last year,” revealed a representative from a transformer manufacturer in Hebei to a reporter from Cailian Press. Multiple transformer producers also reported to Cailian Press that copper-core transformer prices have generally increased by 13% to 20% over the past year.

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