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?

Each Daily News reporter | Zhang Hong      Each Daily News editor | Liao Dan

On March 27, the National Bureau of Statistics released data on profits of industrial enterprises above designated size for January to February.

From January to February, profits of industrial enterprises above designated size across the country increased by 15.2% year over year, with the growth rate accelerating by 14.6 percentage points compared with the full year of last year.

Image source: National Bureau of Statistics 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 in sectors related to nonferrous metals, chemicals, semiconductors, and others surged sharply. To explore the reasons behind the sharp profit surge in the aforementioned industries and whether it is sustainable, the Daily Economic News reporter conducted interviews.

Profits surged in raw-materials sectors such as nonferrous metals

Specifically, in January to February, profits in the nonferrous metals sector increased by 148.2%. Among them, profits in the aluminum rolling and processing, nonferrous metal alloy manufacturing, and copper rolling and processing industries increased by 264.0%, 205.1%, and 50.8%, respectively. Profits in the chemical sector increased by 35.9%, including profits in inorganic salt manufacturing, inorganic acid manufacturing, and organic fertilizer and microbial fertilizer manufacturing, which rose by 518.5%, 306.3%, and 38.5%, respectively.

Which industries are these raw materials tied to?

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

Is the profit growth driven by more orders, or by changes in costs or prices?

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

The sharp surge in nonferrous metals industry profits is mainly “price-driven”—with electrolytic aluminum production capacity approaching a 45 million-ton per year ceiling, copper ore supply continuing to be disrupted, and new demand from areas such as new energy and AI adding momentum. As a result, the center of gravity for aluminum and copper prices has been raised significantly compared with the same period last year, and the spread in processing-stage pricing has expanded markedly.

The chemical industry, on the other hand, benefits more from the “low base + cost improvement” resonance. In the same period of 2025, the chemical industry was trapped in an oversupply predicament characterized by “higher volume, lower profits,” with very thin profit bases for inorganic salt and inorganic acid. This year, the shift downward in upstream coal and crude oil price benchmarks has eased cost pressure. At the same time, “anti-overlap/anti-price-cutting” policies have pushed the industry to reduce output to stabilize prices and accelerate market clearing, allowing product price spreads to be restored.

Overall, contributions from order expansion to profits in both industries are relatively limited; changes in prices and costs are the core driving forces.

Electronics industry profits surged by more than 2x

In terms of high-tech manufacturing, in January to February, profits in the electronics industry and in the semiconductor discrete device manufacturing industry increased by 203.5% and 130.5% year over year, respectively. What are the reasons for the significant profit growth?

Regarding the reasons for the substantial increase in profits, Guotai Fund Management Co., Ltd. said first, there is a low-base effect. In the same period last year, the industry was at the cycle bottom, with inventory de-stocking and a demand off-season, resulting in a low profit base. Second, demand-side support plays a role—especially the continued expansion of 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, which brought some additional incremental contribution to profits.

Is this growth sustainable? In response, Guotai Fund Management Co., Ltd. said that although the growth-rate figures may change with the base from last year, the overall logic of a favorable industry outlook remains unchanged. As intelligent transformation and energy-electronics transformation continue to deepen, the semiconductor industry has gradually moved out of the trough and entered a new round of an upward cycle. In the future, growth momentum will be driven more by technological innovation and structural opportunities in downstream application areas, rather than by base fluctuations alone. Overall, the operating trend remains stable and steady.

Cover image source: Daily Economic News Media Database