2015 non-ferrous metal industry operation and 2016’s expectation

Addtime:2016-03-15 16:35:00

       Faced with the complicated and volatile international economic situation, the increasing downward pressure on the domestic economics and the unfavorable factors such as sluggish market demand, sluggish product prices, and financial market turmoil, the entire industry has earnestly implemented the Party Central Committee and the State Council to stabilize growth and adjust the structure. Promote transformation of various policies and measures, take the initiative to adapt to the new normal, continue to promote structural adjustment, industrial upgrading, and the industry's operations have basically remained stable.

       1. 2015 non-ferrous metal industry operation

(1) Production has maintained steady growth. The output of ten non-ferrous metals was 50.9 million tons, a year-on-year increase of 5.8%, and the growth rate dropped by 1.4 %. Among them, refined copper electrolytic aluminum, lead and zinc production were 7.96 million tons, 31.41 million tons, 3.86 million tons, and 6.15 million tons, respectively, up 4.8%, 8.4%, -5.3%, 4.9%. The output of copper and aluminum was 19.14 million tons and 52.36 million tons respectively, up 7.1% and 9.0% respectively, and the growth rate dropped by 3.6% and 5.7% respectively.

(2) Industry investment declined slightly. The non-ferrous metal industry (including independent gold enterprises) completed fixed assets investment of 761.7 billion (RMB), down 3.2% year-on-year, and declined for the first time in recent years. Among them, non-ferrous metal smelting completed investment of 180.3 billion (RMB), down 5.8% year-on-year, non-ferrous metal processing completed investment of 373.3 billion (RMB), down 2% year-on-year, aluminum industry investment declined particularly significantly, aluminum smelting investment fell 9.9% year-on-year, aluminum rolling processing investment year-on-year decreased by 9.6%. New breakthroughs were made in overseas investment. The Guinea Bauxite Project invested by Shandong Hongqiao Group Ltd and the Peruvian Bambas Copper Project invested by China Minmetals Corporation have been in normal production.

(3) Industry profits have fallen significantly. The annual average price of copper, aluminum, lead and zinc was 40,941 RMB per ton, 12,159 RMB per ton, 13,097 RMB per ton, 15,474 RMB per ton, respectively down 16.8%, 10.2%, 5.5%, 4.1%, the price of battery-grade lithium carbonate have risen sharply, from 43,000 RMB per ton to 123,000 RMB per ton. The above-scale non-ferrous metal industrial enterprises realized the main business income of 5725.3 billion RMB, a year-on-year increase of 0.2%; the realized profit was 179.9 billion RMB, down 13.2% year-on-year, nearly 21% of the enterprises lost money, but the processing industry realized a profit of 108.04 billion RMB, a year-on-year increase of 2.5%, accounting for 60% of the industry's overall profit.

(4)Technological progress continues to advance. The 9-meter super large-scale aluminum alloy monolithic ring for the launch vehicle has been successfully developed, and the 600kA aluminum electrolytic cell has realized industrial application. The level of energy saving and consumption reduction continued to increase. The total AC consumption of primary aluminum was 13562 kWh per ton, down 34 kWh per ton year-on-year; the comprehensive energy consumption for copper, lead and zinc smelting was 256 kg standard coal per ton and 400 kg standard coal per ton, 885 kg of standard coal per ton, respectively decreased by 11.7 kg of standard coal per ton, 33.4 kg of standard coal per ton, and 11.9 kg of standard coal per ton, respectively.

(5)The volume of imports and exports has fallen sharply. The total import and export trade of non-ferrous metals was US$130.7 billion, down 26.2% year-on-year. Among them, the import value was 86.1 billion US dollars, down 13.9%; the export value was 44.6 billion US dollars, down 42.2%. However, the import volume of major mineral products still maintained rapid growth, including 13.32 million tons of copper concentrate, 56.1 million tons of bauxite, 1.9 million tons of lead concentrate and 3.25 million tons of zinc concentrate, which increased by 12.7% and 54.6% respectively 4.9%, 47.6%.

       2. Existed Main problems

(1)The structural side of the supply side is prominent. Although the aluminum smelting industry has substantially reduced losses by 6.6 billion RMB, but the lack of competitive capacity of electrolytic aluminum has a poor exit channel, and it has withdrawn many problems including personnel resettlement, debt resolution, and upstream and downstream industries. At the same time, other non-ferrous metal varieties smelting capacity and medium and low-end processing capacity also appeared excessive, the company's operating rate is not high, product homogeneity is serious, high-end materials are difficult to meet market demand.

(2)State-owned enterprises urgently need to accelerate reforms. The state-owned and holding companies only achieved a profit of 570 million RMB, a sharp drop of 96.5% year-on-year, accounting for only 0.3% of the total profit of the industry, a loss of 41.7%, and a total loss of 37.3 billion yuan, accounting for 66% of the total loss of the whole industry. Problems such as the inflexibility of state-owned enterprise mechanisms have become more prominent, and it is urgent to accelerate reforms to ensure a healthy and stable development of the industry.

(3) The costs of production are rising. The power system reform process is slow. Non-ferrous metal enterprises, especially electrolytic aluminum, zinc smelting, sponge titanium, polysilicon and other high-power consumption enterprises have not been able to enjoy the low electricity cost caused by the fall in coal prices. Factors such as increased investment in environmental protection and an increase in the base of social security expenses have led to an increase in the rigidity of production costs. Corporate financing difficulties and financing problems still exist, and the industry financial expenses increased by 8% year-on-year.

(4) The growth of market demand has slowed down. The growth rate of demand for major non-ferrous metal applications in real estate, home appliances, automobiles, etc. has declined to varying degrees. The newly started housing area (10,000 square meters) has decreased by 14% year-on-year, and the sales rate of home appliance industry has decreased by 1.2% year-on-year. The productions of automobiles down by 4% year-on-year.

      3. The main situation facing and the expectation for 2016

       In 2016, the domestic and international economic environment is more complicated and severe, and the downward pressure on the economy is still increasing. The new normal characteristics of China's economic development are becoming more and more obvious. 2016 is the first year of the “Thirteenth Five-Year Plan”. With the “Thirteenth Five-Year Plan”, the “One Belt and One Road”, the coordinated development of Beijing-Tianjin-Hebei, the construction of the Yangtze River Economic Belt, and the implementation of “Made in China 2025”, and The introduction of a series of steady growth measures will open up new development space for the non-ferrous metal industry and increase new development momentum. However, the global economy will remain weak and the demand for non-ferrous metal products will not increase significantly. It is expected that the price of non-ferrous metal products will remain low and fluctuate in 2016. The growth rate of domestic non-ferrous metal products and the growth rate of fixed-asset investment will further slowdown. The industry will still face greater uncertainty, steady growth and structural adjustment. To speed up the supply-side reform, to reduce production capacity, to leverage, to fill shortcomings, accelerate the transformation and upgrading of the industry, reduce costs and increase efficiency, will be the key work of the management of non-ferrous metals industry in 2016.

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