Non-ferrous metals surged by 148.2%, electronics skyrocketed by 203.5%! The National Bureau of Statistics released data showing that in the first two months, profits in these industries soared. Why?

Everyday Business News reporter | Zhang Hong    Everyday Business News editor | Liao Dan

On March 27, the National Bureau of Statistics released profit data for January to February for industrial enterprises above a designated scale.

From January to February, profits of China’s industrial enterprises above a designated scale increased by 15.2% year over year, with the growth rate accelerating by 14.6 percentage points compared with the whole of last year.

Image source: National Bureau of Statistics official website

A reporter from the Daily Economic News (hereinafter referred to as the Daily Economic News reporter) noted that in the first two months of this year, profits surged sharply in related industries such as nonferrous metals, chemicals, and semiconductors. To explore the reasons behind and the sustainability of the sharp profit surge in the above-mentioned industries, the Daily Economic News reporter conducted interviews.

Profits surge in raw-material sectors such as nonferrous metals

Specifically, from January to February, profits in the nonferrous metals industry grew by 148.2%. Among them, profits in the aluminum rolling and processing industry, nonferrous metal alloy manufacturing, and copper rolling and processing industries increased by 264.0%, 205.1%, and 50.8% respectively; profits in the chemicals industry grew by 35.9%. Among them, profits in the manufacture of inorganic salts, the manufacture of inorganic acids, and the manufacture of organic fertilizers and microbial fertilizers increased by 518.5%, 306.3%, and 38.5% respectively.

Which industries are these raw materials related to?

Guotai Fund Management Co., Ltd. said in an interview with the Daily Economic News reporter that in terms of industries, aluminum rolling and processing products mainly serve new energy vehicle lightweighting, photovoltaic brackets, building structural materials, and power cables; copper rolling and processing corresponds to power infrastructure, AI data centers, new energy electric drive systems, and consumer electronics; and nonferrous alloys are linked to aerospace, the defense industry, and the manufacturing of high-end equipment. In chemicals, inorganic salts are key raw materials for glass, photovoltaics, and lithium batteries; inorganic acids are widely used in metal smelting, fertilizer production, and semiconductor cleaning; and organic fertilizers and microbial fertilizers directly serve green agriculture and soil improvement.

Is their profit growth driven by an increase in orders, or by changes in costs or prices?

Guotai Fund Management Co., Ltd. said that in terms of driving factors, the logic differs somewhat between the two industries.

The sharp profit surge in the nonferrous metals industry is mainly “price-driven”—electrolytic aluminum production capacity is approaching a ceiling of 45 million tons, copper ore supply has continued to be disrupted, and combined with emerging demand such as new energy and AI, the price center of gravity of aluminum and copper has been lifted significantly compared with the same period last year, while the processing-stage price spreads have expanded markedly.

The chemicals industry, meanwhile, benefits more from the “low-base + cost improvement” resonance. In the chemicals industry in the same period of 2025, it was in an oversupply predicament of “more volume but less profit,” and the profit bases for inorganic salts and inorganic acids were extremely thin. This year, with the center of gravity of upstream coal and crude oil prices moving downward, cost pressure has been eased. At the same time, “anti-involution” policies promote the industry to cut production, maintain prices, and accelerate market clearing, leading to a restoration of product price spreads.

Overall, order expansion contributes relatively limitedly to profits in both industries; changes in price and cost are the core driving forces.

Electronic industry profits surge by more than 2 times

For high-tech manufacturing, from January to February, profits in the electronics industry and the semiconductor discrete device manufacturing industry increased by 203.5% and 130.5% year over year, respectively. What is the reason for such a significant increase in profits?

Regarding the reasons for the large increase in profits, Guotai Fund Management Co., Ltd. said first, it is the low-base effect. In the same period last year, the industry was at the bottom of a cycle when inventories were being worked down and demand was in a seasonal lull, so the profit base was relatively low. Second, there is demand-side support—especially continued expansion in demand for power devices and discrete devices from AI servers, high-performance computing, and automotive electronics—which provides stable order support for discrete device manufacturing. Products also saw price increases to varying degrees, bringing some incremental contribution to profits.

Is the growth sustainable? In response, Guotai Fund Management Co., Ltd. said that although the figures for growth rates may change with the base from last year, the overall logic of the industry remaining in a positive direction will not change. As intelligent transformation and the electrification of energy continue to deepen, the semiconductor industry has gradually emerged from the downturn and entered a new upcycle. In the future, growth momentum will be driven more by structural opportunities from technological innovation and downstream application areas rather than simply by fluctuations in the base; overall, the operating trend remains steady.

Cover image source: Daily Economic News media database