1. Upstream industry originally refers to the initial industry of the whole industrial chain, including the exploitation and supply of important resources and raw materials, as well as the manufacturing and production of parts. This industry determines the development speed of other industries and has the characteristics of foundation, raw materials and strong correlation.
2. Downstream industry refers to the industry at the end of the whole industrial chain, including processing raw materials and parts, manufacturing finished products and engaging in production and services. Upstream often holds some resources, such as minerals, or industries with core technologies and high barriers to entry, so many investors prefer stocks in upstream industries.
Relationship between upstream industry and downstream industry
In the industry category, upstream enterprises are relative to downstream enterprises, and refer to enterprises and manufacturers in the initial stage of production and operation of the industry. These manufacturers mainly produce raw materials and primary products necessary for downstream enterprises. Downstream enterprises mainly process and modify raw materials and turn them into actual products in production and life.
It can be said that upstream enterprises and downstream enterprises are interdependent. Without the raw materials provided by upstream enterprises, downstream enterprises are like clever women who can't cook without rice; If there is no downstream enterprise to produce products and put them into the market, the materials of upstream enterprises will be useless. Therefore, upstream enterprises and downstream enterprises in various industries should share joys and sorrows, help each other and develop together.