The following discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the notes to those financial statements appearing elsewhere in this Form 10-Q.

Certain statements in this Report, and the documents incorporated by reference herein, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include statements, which involve risks and uncertainties, regarding, among other things, (a) our projected sales, profitability, and cash flows, (b) our growth strategies, (c) anticipated trends in our industries, (d) our future financing plans, and (e) our anticipated needs for, and use of, working capital. They are generally identifiable by use of the words "may," "will," "should," "anticipate," "estimate," "plan," "potential," "project," "continuing," "ongoing," "expects," "management believes," "we believe," "we intend," or the negative of these words or other variations on these words or comparable terminology. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under "Risk Factors" in our Annual Report on Form 10-K and matters described in this report generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur. You should not place undue reliance on these forward-looking statements.

The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

The "Company", "we," "us," "our," and the "Registrant" refer to (i) Fushi Copperweld, Inc. (formerly Fushi International, Inc.), (ii) Fushi Holdings, Inc.(formerly Diversified Product Inspections, Inc.) ("Fushi Holdings"), (iii) Fushi International (Dalian) Bimetallic Cable Co., Ltd. (formerly Dalian Diversified Product Inspections Bimetallic Cable, Co., Ltd.) ("Fushi International (Dalian)"), (iv) Dalian Fushi Bimetallic Wire Manufacturing, Co., Ltd. ("Dalian Fushi"), (v) Copperweld Holdings, LLC, (vi) Copperweld Bimetallic, LLC ("Copperweld"), (vii) Copperweld Bimetallics UK, LLC, and (viii) Copperweld International Holdings, LLC.

Overview

Since our founding in 2002, we have grown to be the leading manufacturer of bimetallic products in the world. Today, we serve approximately 300 customers in 30 countries from our facilities in Dalian, PRC, Fayetteville, Tennessee and Telford, U.K. Historically, our principal product produced in Dalian has been Copper-Clad Aluminum, or CCA, which combines the conductivity and corrosion resistance of copper with the light weight and relatively low cost of aluminum. On October 29, of 2007, we acquired Copperweld with manufacturing operations in Fayetteville, Tennessee and Telford, U.K. During the first quarter of 2008, Fayetteville shipped our products to 128 customers in 16 countries on four continents, Telford shipped to 44 customers in 11 countries and Dalian shipped to 230 customers in seven countries. The Fayetteville facility produces both CCA and Copper-Clad Steel, or CCS which combines the conductivity of copper with the strength of steel. The Telford facility further processes material produced in Fayetteville. We now produce both CCA and CCS and have a worldwide presence that combines Fushi's recognition in China with the worldwide recognition of the Copperweld brand.

During the first quarter 2008, in Dalian, we continued our development of bimetallic wire products to further expand our sales in the utility industry. CCA flat wire offers greater value than copper wire because of its reduced cost and weight while it maintains conductivity standards needed by utility companies. We believe the successful installation of Copperweld's cladding technology completed at the onset of second quarter of 2008 should further allow us to improve the quality of our bimetallic flat wire and enable us to produce larger diameter flat wire products for the PRC market, further expanding our product offerings.

During first quarter 2008, we further increased sales into the utility market at our Dalian facility through the introduction of small amounts of CCA wire for use in low voltage power cable. CCA wire for use in low voltage power cable is still in the early stages of its development; however, we are working closely with customers and regulatory bodies to gain nationwide approval in the PRC. We believe that as we further develop and improve this product application, CCA wire for use in power transmission applications will prove to be a viable substitute to copper wire.

We believe that the utility market for bimetallics in the PRC is underdeveloped relative to other markets worldwide and could serve as an area of significant growth for our Dalian facility. Our expectation is based on the response by the two largest power grid operators, State Grid Corporation (SGCC) and China Southern Grid (SGC), to widespread blackouts and power shortages experienced in the PRC between 2002 and 2005. According to strategy laid out by SGCC and SGC for the Eleventh Five Year Plan, they plan to spend RMB 1,200 billion in total transmission and distribution ("T&D") capital expenditures over a five year time period beginning in 2007.

Normally using 70% less copper than conventional copper wire, but offering materially the same utility and functionality, our CCA products provide a superior value compared to solid copper wire in a wide variety of applications such as, distribution lines for telecommunication networks, cables for the wireless industry, automotive and consumer products, video and data applications, electrical power cables, wire components for electronic devices, building wire, as well as other industrial wires. CCS combines the functionality of copper with the strength of steel to provide a higher value, stronger alternative to solid copper for use in coaxial drop cables for cable television, utility applications including ground cables and tracer wire, automotive wiring harnesses and other applications requiring specific levels of conductivity and higher levels of tensile strength. Copperweld CCS is synonymous with copper-clad steel and is registered as CopperweldŽ. Traditionally the telecom industry has been the primary user of bimetallic products for the combined companies; however, the utility, automotive and consumer goods are market sectors providing strong demand for copper-clad products. Both CCA and CCS products are available in a large variety of sizes, conductivities and strengths for the different applications of customer inquiries. CCA and CopperweldŽ deliver outstanding reliability, performance and value compared to solid copper.

The high price of copper over recent years has shifted demand to higher value products such as CCA and CCS. The volatility of copper is the primary cause of cost variations in our products. Although an increase in the price of copper may serve to reduce our gross margins as a percentage of net sales and a decline in copper prices will increase our gross margin as a percentage of net sales, changes in raw material costs do not materially affect our earnings per share. Because as is typical in the industry, we pass the dollar amount of price changes to our customers rather than the percentage changes in our raw material costs; therefore, the impact on earnings per share from volatile raw material prices is minimal.

The price of copper impacts our operations in two significant ways. First, copper is one of the principal raw materials used in manufacturing our products. Beginning in mid-2005, copper prices began trending upward. The upward trend continued during the first quarter of 2006 until a slight downturn during November and December. The trend for 2007 was similar to the previous year although with an average Comex price of $7,103 per metric ton compared to $6,811 during 2006. During the first quarter of 2008, copper prices continued to escalate compared to the same quarter last year. The average Comex copper price was $7,791 per ton for the first quarter of 2008 compared to an average of $5,954 during the same quarter in 2007. When the prices of raw materials increase, we pass those increases through to our customers. Conversely, when raw material prices decline, we pass those savings through to our customers as well. The practice of passing changes in raw material costs to our customers is not a perfect hedge against fluctuating prices, but it allows us to protect our net margin as measured by net income or by earnings per share since our sales prices are determined at the time the sales order is received. In Dalian we regularly make advance payments to our suppliers to lock in copper supplies with the side benefit of locking in prices when copper prices are increasing. At March 31, 2008, we had outstanding advances to raw material suppliers of $10.5 million. In Fayetteville, some suppliers of copper cathode require us to pay for the shipments at the cathode stage even though the copper must be further processed which locks in the cost of our future supply. In neither location are we attempting to forecast the cost of copper or other raw materials, nor are we attempting to hedge the changing costs of raw materials.

The second way that the price of copper influences our operations is that our products are used as a viable substitute for copper. Historically, when there is a large differential between the price of copper and aluminum, demand for our product increases. When the differential narrows, demand for our product may moderate. However, cost is not the only factor affecting the demand for our copper-clad products. Our expanding markets such as the automotive and utility industries have factors driving their demand for bimetallic products other than cost. Our products advantages over copper including lower weight, greater strength and lower susceptibility to theft, among other factors. So, while price is a factor, price alone does not drive our business.

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The preceding chart reflects the trend in copper based on average monthly Comex prices. The chart shows the general trend to higher copper prices over the prior three years and during the first quarter of 2008. The 2008 year began at the highest level of the four comparative years shown in the chart. For the quarter ended March 31, 2008, the average Comex price for copper increased over the same quarter in 2007 by $1,837 per ton. As a measure of the increasing trend in the price of copper over time, the Comex average price per ton for the first quarter of 2008 increased over the first quarter of 2005 Comex average by $4,556 per ton, an increase of 140.8%. The average price per ton paid for copper including processing costs during the first quarter of 2008 was $8,439 in Dalian and $8,018 in Fayetteville compared to $7,485 and $7,520 for the same quarter in 2007. As discussed previously, we do not attempt to hedge the costs of copper, but rather pass the changes in price through to our customers.

The two other major components in our products are aluminum and steel. The monthly average cost of aluminum for the first quarter of 2008 increased over first quarter 2007 levels by approximately $4.34 per ton but compared to copper, aluminum has been stable. The following chart, based on Comex average monthly prices, shows that the average Comex price for aluminum began near 2006 levels but moved upward each month during this most recent quarter surpassing the average price for the same quarter in 2007. During the quarter ended March 31, 2008, the average cost for aluminum purchased by the Dalian facility was $2,284 per ton and $3,195 per ton by Fayetteville. As with copper, we do not attempt to predict future prices for aluminum, but rather cover our risk by passing changes in the costs of aluminum to our customers.

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The cost of steel varies by the type steel that is used for the various applications. The average cost of steel used by the Fayetteville facility over the past three years was less than one-half the cost of aluminum and was between one-eighth and one-fifth the cost of copper. Steel prices have been relatively stable; however, beginning with the first quarter of 2008, the price of steel began to increase. The average price paid by Fayetteville for steel increased $131 per ton, from $918 per ton paid during the first quarter of to $1,050 per ton during the first quarter of 2008, a 14.3% increase. We do not project the cost of raw materials but our suppliers believe that steel will remain at higher levels throughout 2008. Our Dalian facility purchased an insignificant amount of steel because we primarily produce CCA in Dalian.

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Outlook for the remainder of 2008

With respect to the overall business trend for the remainder of 2008 and forward, we anticipate sales growth to continue to be aggressive and broadly based, principally due to consolidating our marketing and sales operations, the continuing demand for our products in the PRC and the influence of the Copperweld name throughout the world. We have the resources, technology, working capital and capacity to meet growing market demands. We are now strategically located so that we can serve the world's demand for bimetallic products.

Results of Operations

Quarter Ended

The following table shows, for the periods indicated, information derived from
our consolidated statements of income.

                                           Increase/        3/31/2008      3/31/2007
(in '000 except for percentage and EPS)    (Decrease)      Unaudited      Unaudited
Net sales                                        155.5 %  $     54,009   $     21,138
Gross Profit                                      91.7 %       ?14,734         ?7,685
Operating Income                                  46.4 %        ?8,887         ?6,069
Net income                                        52.2 %        ?7,570         ?4,975
                                                     ?               ?              ?
Gross Margins                                        ?           ?27.3 %        ?36.4 %
Net Margins                                          ?           ?14.3 %        ?23.5 %
                                                     ?               ?              ?
EPS- Basic                                        15.4 %  $      ?0.28   $      ?0.24
EPS- Diluted                                      23.8 %  $      ?0.26   $      ?0.21

Net sales increased 155.5% for the quarter ended March 31, 2008 compared to the comparable quarter of the previous year. Approximately one-third of the increase resulted from the Copperweld acquisition in October of 2007. The balance of the increase is primarily due to an increase in volume at the Dalian facility from 3,408 metric tons to 5,771 metric tons, representing a 69.4% growth. Gross profit increased $7.05 million or 91.7% quarter over quarter. Net income increased by $2.6 million or 52.2% for the quarter ended March 31 2008 compared to the same quarter in 2007. The gross margin declined from 36.4% to 27.3% from the first quarter of 2007 to the same quarter this year due primarily to lower margins contributed by the Fayetteville and Telford facilities. Basic earnings per share was $0.28 and on a fully diluted basis was $0.26.

Financial position at quarter ended March 31, 2008 (unaudited) and the year ended December 31, 2007:

                              3/31/2008      12/31/2007
(in '000)                     Unaudited      Unaudited
Cash                         $    78,581   $      79,915
Accounts Receivable, net         ?34,370         ?23,611
PP&E, net                        ?94,963         ?87,229
Total assets                    ?282,809        ?246,469
Short term debt                  ?38,478         ?23,840
Long term debt                   ?45,000         ?60,000
Total stockholders' equity       170,039        ?144,288

Our financial condition continues to improve as shown by an increase of 17.8% in shareholders' equity during the first quarter of 2008. Cash decreased 1.7% during the quarter and our accounts receivable increased by 45.6% as a result of increased sales volume. Property, plant and equipment increased by 8.9% during the quarter ended March 31, 2008 compared to the prior year end. Short term debt increased by 61.1% as a result of an increase in short term borrowings. Long term debt declined by 25.0% because the holder of $20.0 million in our convertible notes converted $15.0 million of such notes during the first quarter of 2008.

Net Sales

Net sales were $54.0 million during the first quarter of 2008 compared to $21.1 million during the first quarter of 2007. Of the 155.5% in sales growth in the quarter ended March 31, 2008, Fayetteville and Telford contributed $18.0 million or 33.4% of first quarter sales based on net revenue. Dalian increased net revenue by 70.2% based on net revenue for the quarter ended March 31, 2008 compared to the same quarter in 2007. The increase in Dalian's net revenue was based on increased volumes. The majority of the increase quarter over quarter resulted from increased volumes coming from the addition of Fayetteville and Telford, including sales from CCS that we had not had prior to the current quarter.

                                      31-Mar-08      31-Mar-07     Change
CCA                                  $ 42,325,612   $ 21,137,917     100.2 %
CCS                                    10,615,699              -     100.0 %
Other(include Scrap, FCA, FCS etc)      1,067,716              -     100.0 %
Total Net Revenue                    $ 54,009,027   $ 21,137,917     155.5 %

The following table breaks down application categories as percentage of total sales.

                 3/31/2008                  3/31/2007
            Tons         % of          Tons         % of
          shipped     Total Sales    shipped     Total Sales
Telecom      6,007            63.3 %    2,450            71.9 %
Utility      2,264            23.9 %        1             0.0 %
Auto             3             0.0 %        -             0.0 %
Other        1,213            12.8 %      957            28.1 %
Total        9,486           100.0 %    3,408           100.0 %

We are continuing to expand our markets beyond telecom, which historically has been the major user of our products, both in Dalian and Fayetteville. Telecom represented 71.9% of sales for the quarter that ended at March 31, 2007, but dropped to 62.9% at the end of the first quarter of 2008 while the actual volume increased by 145.2% comparing the two quarters. We anticipate that telecom will continue to maintain current or expanded volumes but our goal is to expand into other markets as well. The addition of Telford and Fayetteville has provided additional sales opportunities in the utility area. We believe that automotive, while comparatively small at present, joins the utility market as a potential market for future growth.

The following table presents sales breaks down by categories among our facilities:

                     Dalian                     Fayetteville                  Telford
                              % of          Tons         % of          Tons          % of
          Tons shipped     Total Sales    shipped     Total Sales     shipped     Total Sales
Telecom           4,437           46.77 %    1,551           16.35 %        19            0.20 %
Utility             590            6.22 %    1,656           17.45 %        18            0.19 %
Auto                  -            0.00 %        3            0.09 %         -            0.00 %
Other               748            7.88 %      425            4.48 %        40            0.42 %
Total             5,774           60.87 %    3,635           38.37 %        77            0.81 %

The following table summarizes installed capacities and outputs for both Dalian and Fayetteville for the quarter ended March 31, 2008. Capacity is stated on an annual basis while output is that for the quarter. Telford's production is reflected in Fayetteville's numbers because Telford further processes Fayetteville's production.

                              Dalian                              Fayetteville
                Installed Capacity       Output        Installed Capacity       Output
Product line       Metric Tons         Metric Tons        Metric Tons         Metric Tons
CCA                          33,600           5,774                 15,000           1,073
CCS                                                                 20,000           2,559
Total                        33,600           5,774                 35,000           3,632

At March 31, 2008, we had combined annual production capacity for CCA of 48,600 metric tons and CCS capacity of 20,000 metric tons on an annual basis. We expect to have additional CCA capacity installed in Dalian during the first quarter of 2009. Nexans confirmed our order for a new cladding line on March 18, 2008 and we made the deposit on the line on April 22, 2008 with delivery and installation expected in early 2009. The decision to purchase a new clad line versus refurbishing an existing line was made on the basis of costs. The estimated cost to refurbish a line from Fayetteville was approximately the same as purchasing a new machine. We plan to have additional CCS capacity installed by the end of 2008 if sales projections for CCS in the Asian markets warrant expansion. For the first quarter of 2008, the average price of CCA produced in Dalian and sold primarily in the PRC was $6,137 per ton while the average price of CCA produced in Fayetteville was $6,443 per ton. CCS produced in Fayetteville sold for an average of $3,968. Both Dalian and Fayetteville sell a variety of CCA products and the price for each variety may vary based on the amount of manufacturing required and the ratio of copper to aluminum. Dalian did not sell a significant amount of CCS during the first quarter of 2008. As with CCA, the average selling price of CCS varies by product type primarily based on the amount of copper in the product and the amount of manufacturing required. Sales referred to as Fayetteville include the sales from Telford also.

Customers

We continued to expand and diversify our customer base during the first quarter of 2008. Our five largest customers accounted for 19.9% of sales during the first quarter of 2008, down from 32.6% for the first quarter of 2007. No single customer represented more than 5.0% of net sales during the most recent quarter. During the same quarter last year, we had a customer that represented 11.0% of net sales. Our ten largest customers accounted for 32.3% of net sales during the first quarter of 2008 compared to 55.9% during the first quarter of 2007. We believe this increased diversification significantly limits our market risk and gives us a stronger base on which to expand. We further believe our overall customer composition and the concentration of our top customers will continue to change as we expand our business and seek to shift our product sales portfolio to higher margin products. However, the loss of, or significant reduction in orders from any of our largest customers may have a material adverse impact on our financial condition and operating results. We are continuing to expand and consolidate the direction of our combined sales and marketing group in order to focus our resources on diversification of our customer base, product mix and geographic presence to mitigate customer concentration risk. Our objective is to focus on expanding our existing business relationships by offering a wider range of products and building new sales relationships throughout the world with our expanded sales organization.

The following table for the first quarter of 2008 sets forth our ten largest customers:

Originating Office    Tons Sold Quarter     Amount of Sales     % Total Sales
Fayetteville                       527.7           2,598,588               4.8 %
Fayetteville                       424.8           2,528,059               4.7 %
Dalian                             389.3           1,945,591               3.6 %
Dalian                             329.1           1,861,780               3.4 %
Dalian                             293.8           1,804,143               3.3 %
Dalian                             278.7           1,637,728               3.0 %
Dalian                             220.7           1,383,480               2.6 %
Fayetteville                       235.3           1,314,123               2.4 %
Dalian                             215.9           1,256,044               2.3 %
Dalian                             192.4           1,115,674               2.1 %

Our manufacturing activities are determined and scheduled upon both firm orders and projected sales information gathered by our sales personnel from direct contact with our customers. Customers typically submit purchase orders seven to thirty days prior to the requested delivery date. However, depending on the product and the available equipment run schedules, the lead time can be as short as three days. The sales price is determined at the time of purchase based on a formula or a unit price for each product. In either case, the purchase price is a function of the market price of our raw materials at the time of purchase, subject to adjustment at the time of delivery for many of our customers. For some customers, we adjust our prices based on the cost of raw materials for the previous month rather that prices at the time of shipment.

Geographically, a substantial portion of our customers served by our Dalian sales force is based in the PRC. Some of our customers are US based corporations that have established subsidiaries operating inside the PRC. Several of these corporations were former customers of our Fayetteville facility but now place orders through their subsidiaries located in the PRC. We categorize these orders as domestic orders within the PRC. On the other hand, most of our customers served by our Fayetteville and Telford based sales group are located in the Americas, Europe, Africa, Asia, excluding the PRC and the Middle East. We are transferring our Asian customers to our PRC based sales group in order to provide more efficient customer service. As a result, we anticipate that most of our net sales will continue to be derived from sales to our Asian customers. We anticipate that our sales growth can continue worldwide because of our working . . .