In February 2022, the Russia-Ukraine conflict broke out. More than 400 days after the outbreak of the Russian-Ukrainian crisis, the outcome remains uncertain. Affected by this international turmoil, Europe is facing an unprecedented energy crisis, and European countries are accelerating the development and use of new energy. According to the data of the China Automobile Circulation Association, the European market has become the main new export area of China's new energy vehicles. In the first three quarters of this year, nearly 90% of China's new energy vehicles were sold to Asia and Europe. In the first nine months of this year, Belgium, the United Kingdom and Thailand became the top three countries for China's new energy vehicle exports. In addition to new energy vehicles, the rapid development of new energy markets such as photovoltaic and energy storage has provided a broad market space for Chinese inductors and electronic transformer enterprises to enter the European market.
Chief Executive Mr. CAI believes that after the war between Russia and Ukraine, European and American companies will accelerate the promotion of photovoltaic and other new energy industries, and some production and research and development bases will be invested overseas, especially in China, which is a good opportunity for our Chinese enterprises, including inductors and electronic transformer companies, the traditional consumer electronics field is weak, and the new energy market is rising. In the first half of 2022, due to the impact of international tensions and the weakening effect of the home economy, the demand for traditional consumer electronics markets such as PC, TV and mobile phones has cooled significantly.
Taking the smartphone market as an example, data from the China Institute of Information and Communication Technology show that from January to October 2022, the overall shipments of mobile phones in the domestic market totaled 220 million units, down 21.9% year-on-year, of which 5G mobile phone shipments totaled 173 million units, down 17.7% year-on-year. Xiaomi, OPPO, vivo and other domestic mainstream smartphone manufacturers have proposed to cut orders. The traditional consumer electronics field is weak, so that inductors and electronic transformer industry enterprises have shifted the focus of development to the field of new energy.
Copper prices fell sharply, and wire companies lost money. Since 2020, copper prices have risen from a low of 35,000 yuan/ton to 78,000 yuan/ton, an increase of more than 120%. For this reason, most wire companies have prepared materials. In the second quarter of this year, all kinds of commodity prices gradually fell, copper prices also fell from the peak, the lowest even to 54,000 yuan/ton. Due to the rapid decline in copper prices this round, many companies have no time to adjust, making the inventory of raw materials greatly depreciated, and the inventory cost increased, and some wire companies are losing millions of yuan.
In the face of "fluctuating" copper prices, on the one hand, timely understanding of the price of copper, grasp the price trend, seize the opportunity to stock, has become a required course for wire enterprises; On the other hand, wire companies should also try to avoid falling into the future of copper price trends in the bet, will focus more on seeking new profit growth points, may be more helpful.
