Review of the Nonferrous Metal Sector in 2009   

In 2009 China's nonferrous metal sector gradually improved its economic performance along with the recovery of operation and production, the Ministry of Industry and Information Technology of China recently judged in a reviewing report.

1. The production restored gradually and the output rose

From April 2009, China's nonferrous metal output began to pick up with the capacity utilization rate increasing gradually. The national total output of the 10 kinds of nonferrous metals exceeded 2.00 million tons in May and posted year over year growth from July. The production basically returned to normal level after August. The total output of the 10 kinds of nonferrous metals was 26.81 million tons in 2009, an increase of 5.8% over the previous year. Of the total, the output of electrolytic aluminum was 12.99 million tons, an increase of 1% and the output growth was 9.6% for copper, 16.4% for lead, 11.6% for zinc and 4.4% for aluminum oxide.

2. The prices rebounded strongly

The average price of spot goods in the domestic market was RMB28 909 per ton for copper, RMB12 141 per ton for aluminum, RMB11 083 per ton for lead and RMB11 083 per ton for zinc in January 2009. It increased to RMB52 504 per ton for copper, RMB15 335 per ton for aluminum, RMB15 796 per ton for lead and RMB16 940 per ton for zinc in November, an increase of 81.6%, 26.3%, 27.9% and 51.9% across the ten months respectively. The average price of spot goods in the domestic market was RMB55 695 per ton for copper, RMB15 839 per ton for aluminum, RMB15 857 per ton for lead and RMB18 822 per ton for zinc in December, an increase of 6.1%, 3.2%, 0.3% and 11.7% respectively over November.

3. The overall performance was improved and the profit increased every month

The sector's all enterprises above designated scale (not including pure gold manufacturers) achieved a combined sales revenue of RMB1 909.58 billion from January to November 2009, a drop of 2.96% from the same period of the previous year and recorded RMB61.763 billion in profit, a drop of 27.66%. The 70 major enterprises in the nonferrous metal sector accomplished combined sales revenue of RMB647.9 billion in 2009, an increase of 0.72% over the previous year, and recorded a profit of RMB17.6 billion, a drop of 1.46%.

4. The investment remained growing

China's nonferrous metal sector together invested RMB271.69 billion in fixed asset in 2009, an increase of 16.5% over the previous year, and the growth was 24.4 percentage points lower than the previous year. The total planned investment for the new projects that were launched in 2009 was RMB286.03 billion, an increase of 38.7% over the previous year.

5. The energy consumption rate in production reduced drastically

The new technology for low-temperature low-voltage aluminum electrolysis developed by China itself was used in commercial production in 2009. The DC power consumption in aluminum electrolysis therefore fell drastically. The comprehensive AC power consumption in aluminum ingot was 152 kWh/t lower than the previous year and the comprehensive energy consumption was 19.29% lower for aluminum oxide, 7.2% lower for copper smelting, 2.82% lower for lead smelting and 3.18% lower for electrolytic zinc.

6. Merge and acquisition achieved new advances

China Minmetals Corporation merged Hunan Nonferrous Metal Holding Group Co., Ltd., and the agreement was signed at the end of 2009. China National Gold Group Corporation merged some nonferrous metal mines such as Tibet Jiama Copper Mine. Yunnan Metallurgical Group Co., Ltd. acquired 100% stakes that Alcoa held in Alcoa (Shanghai) Co., Ltd. China Nonferrous Metal Mining (Group) Co., Ltd. acquired Shandong Albetter Albronze Co., Ltd.

7. The overseas resources acquisition took a big stride

In 2009 China Minmetals Corporation, China Nonferrous Metal Mining (Group) Co., Ltd. and the Lingnan branch of China National Gold Group Corporation acquired partial stakes in OzMineral, Terramin and PEM of Australia, respectively. East China Nonferrous Metal Geological Prospecting Bureau acquired 50.1% stakes of WTI through London Exchange. Jilin Jien Nickel Industry Co., Ltd. acquired three nickel mine projects in Canada and one nickel/cobalt project in Australia. Jinchuan Group Ltd. and TiominResource of Canada signed an investment agreement. China Nonferrous Metal Mining (Group) Co., Ltd. acquired a large copper mine in Zambia and a large gold mine in Kirghizia.

8. The imports surged

In 2009 China imported 3.238 million tons of non-forged copper, 1.7394 million tons of non-forged aluminum, 204 100 tons of non-forged lead and 802 900 tons of non-forged zinc, an increase of 115.2%, 5.7 times, 2.4 times and 1.43 times respectively over the previous year. China also imported 6.132 million tons of copper concentrate, 1.60 million tons of lead concentrate, 3.85 million tons of zinc concentrate and 5.14 million tons of aluminum oxide, an annual increase of 18.2%, 11.3%, 61.49% and 12.1% respectively. In 2009 China exported 73 100 tons of non-forged copper and 310 200 tons of forged aluminum, a drop of 24.1 and 63.1% from the previous year.
   China's nonferrous metal sector developed well in 2009. However, problems are still there. The first problem is that the capacity of electrolytic aluminum is in serious surplus. It has already reached around 20.0 million t/a, being around 7.0 million t/a higher than the local demand. The second problem is that the industrial structure is irrational and outdated facilities need to be eliminated. The third problem is that the recovery is not yet firm.
   In 2010 the Ministry of Industry and Information Technology will help the nonferrous metal sector to:
  * Control the total capacity and accelerate the elimination of outdated capacities;
  * Develop high-tech, refined and intensively-processed products and new materials to meet the requirements on nonferrous metal products in various sectors;
  * Formulate conditions for the admission to the nonferrous metal sector and publish lists of enterprises conforming to admission conditions;
  * Speed up merging and regrouping.