Group 1 - The rising copper prices in Japan have led to a trend of substituting aluminum for copper in cable production, as aluminum costs significantly less, priced at approximately $2,850 to $2,890 per ton, which is about one-fourth of copper's price [2][5] - JX Metals reported a record copper benchmark price of 1.8 million yen per ton (approximately 81,700 RMB), marking a 25% increase compared to the end of last year, and more than double the average price from five years ago [2][4] - The increase in copper prices is influenced by the London Metal Exchange (LME) prices and the depreciation of the yen, which has raised Japan's copper import costs [2] Group 2 - The price of brass round bars, a representative copper product, has also increased, with wholesale prices around 1,417 yen per kilogram, up 20% from last year, although demand remains sluggish due to labor shortages in the housing sector [4] - Despite low demand in construction, copper prices continue to rise, prompting discussions about replacing brass with stainless steel in various applications, as the price gap between the two is narrowing [5] - Companies like J-Power HST are shifting their strategy to proactively expand sales of aluminum cables, focusing on existing customers, while still acknowledging that copper remains irreplaceable in many applications due to its superior conductivity [7]

Investment Rating - The report maintains an "Increase" rating for the non-ferrous metals industry, indicating a positive outlook for the sector [6]. Core Insights - The rapid development of data centers in the United States is causing concerns over electricity supply, which presents investment opportunities in the aluminum sector [1]. - In 2024, U.S. electricity generation is projected to be approximately 42.5% of China's, with industrial electricity consumption accounting for 26% of total usage [1]. - The electricity consumption of data centers in the U.S. is expected to rise from 4% of total electricity usage in 2024 to 12% by 2030, indicating significant growth in demand [1]. - U.S. electrolytic aluminum production in 2024 is estimated at 670,000 tons, representing 0.9% of global production, and is significantly lower than the 3.67 million tons produced in 2000 [2][3]. - The electricity cost for producing aluminum in the U.S. is approximately 1.9 times higher than in China, which poses economic challenges for U.S. aluminum producers [3]. Summary by Sections Data Center Electricity Demand - The electricity consumption of data centers in the U.S. is projected to increase significantly, with an estimated 178 TWh in 2024 and 606 TWh by 2030, which will account for 41% of the increase in U.S. electricity demand from 2024 to 2030 [1][3]. U.S. Aluminum Production - The U.S. electrolytic aluminum production capacity is concentrated in a few plants, with total production expected to be 670,000 tons in 2024, a drastic decline from 3.67 million tons in 2000 due to rising electricity costs [2]. Investment Recommendations - The report recommends investing in companies such as Yun Aluminum, China Hongqiao, and Shenhuo Co., while keeping an eye on China Aluminum and Zhongfu Industrial, as the demand for aluminum is expected to rise due to data center growth [4].