Copper Prices Swing Sharply at High Levels, Putting Pressure on the Lighting Industry and Sparking Industrial Restructuring

Looking back at recent commodity market movements, Shanghai copper maintained an overall upward trend in 2026. It once hit 110,000 yuan per tonne in early September, while LME copper touched a new all-time high. After the sharp rally, the market saw a short-term pullback, yet prices remain in a historically high range with wide fluctuations. Multiple factors have driven this copper price surge: tight global copper mine supply, low inventories, expected US copper tariffs and geopolitical disruptions. Industry insiders generally agree copper prices will hardly fall back to low levels anytime soon.

Different types of lighting fixtures are impacted to vastly different degrees, further widening divides across the sector.

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Solid copper chandeliers, vintage brass lights and copper wall lamps suffer the most severe impact. Copper accounts for 35% to 60% of the total production cost of these products. Every 10% rise in copper prices squeezes corporate gross profit margins by roughly 6 percentage points. This category has become the biggest pain point for manufacturers in Guzhen. Faced with rising raw material costs, enterprises have two main options: raise product quotations and pass cost pressures downstream to distributors, or adjust product specifications by thinning copper plates or using zinc alloy electroplated with brass to replace solid copper components. This has fuelled heated debates over “genuine vs fake solid-copper lamps”. Many distributors note that lamps with identical appearances may differ greatly in internal materials, making it hard for ordinary buyers to tell the difference.

Common products such as ceiling lamps, downlights, panel lights and aluminium track lighting are less affected. For these lights, copper is only used in internal wires, lamp holders and copper foils on PCBs, accounting for merely 3% to 8% of total costs. Although prices of wires and lamp holders have also gone up, the impact on the final price of complete lamps remains limited. Most manufacturers choose to absorb rising costs internally, and retail prices for end consumers stay largely stable.

Nevertheless, upstream lighting component makers bear the most rigid pressure from copper price hikes. For power cords, lamp holders, copper terminals and other accessories, copper serves as the core raw material and makes up over 65% of wire production costs. Whenever copper prices fluctuate, cable manufacturers are the first to adjust prices. The cost pressure then passes down the supply chain, forcing all lighting producers to pay more for components, representing a universal cost increase across the whole industry.

Three notable shifts are taking place within the lighting industrial chain amid raw material inflation.

First, profit margins keep shrinking, small and medium enterprises face mounting survival pressure, and the industry is undergoing accelerated reshuffling. The lighting sector has long suffered low overall gross margins and fierce price competition. Despite rising raw material costs, retail and engineering clients are reluctant to accept price increases, so many factories dare not lift quotations and have to bear extra costs themselves. Smaller manufacturers lack access to long-term raw material supply agreements and futures hedging tools, so their profits get eroded first. By contrast, leading branded firms can mitigate copper price volatility through annual long-term contracts, raw material stockpiling and hedging strategies. They boast stronger risk resistance, and orders are gradually concentrating on large players. A widespread industry dilemma persists: costs keep rising while downstream customers resist price hikes, putting enterprises in a tough position.

Second, material substitutions are widely adopted, accompanied by growing disputes over product quality. To cut costs, many manufacturers replace traditional solid copper wires with copper-aluminium composite cables. For lamp bodies, zinc alloy and aluminium alloy with brass electroplating are heavily used as substitutes for solid brass. While such alternatives reduce raw material expenses, they compromise electrical conductivity, oxidation resistance and surface texture. Many distributors complain that many lamps labelled as “solid copper” actually use thinner materials or substituted metals. Inconsistent industry standards have led to more after-sales quality complaints.

Third, industry quotation rules have changed dramatically, and the valid period for locked prices has shortened greatly. Previously, many lighting factories in Guzhen could offer price validity for 30 to 45 days. Today, most can only guarantee prices for 7 to 15 days. For large-value orders, many enterprises add copper price fluctuation clauses into contracts, stipulating that product prices will adjust synchronously with raw material price changes. Unstable quotations make distributors more cautious about inventory and hesitant to stock up in bulk, leading to conservative inventory strategies across the sector.

Two contrasting viewpoints have emerged within the industry regarding high and volatile copper prices.

Optimists are mainly brand owners and whole-home lighting solution providers. They believe higher raw material costs can push the industry out of cutthroat price competition. Enterprises are encouraged to shift toward higher-value segments such as whole-home lighting design, human-centric lighting and premium copper lighting. Premium services and solutions can offset risks brought by raw material price swings.

On the pessimistic side are most small and medium copper lamp factories and export manufacturers. Faced with high copper prices alongside weak home decoration demand, these businesses are squeezed from both ends. Raising prices risks losing customers, while keeping prices low yields no profit. Export orders have weak bargaining power; it is difficult to pass rising raw material costs to overseas buyers, greatly compressing profit margins on export shipments.

As the Autumn Guzhen Lighting Fair in October draws near, cost challenges triggered by copper prices will become a key topic for discussion among exhibitors. Against the backdrop of volatile raw materials and subdued market demand, how the lighting industry balances costs, quality and pricing will remain a critical issue for businesses to address over the long term.