China’s Growing Dependence on Foreign Supplies Makes it Urgently Necessary to Develop the Secondary Metal Industry

Recently, copper has been successfully produced under the secondary copper smelting project with an annual capacity of 300,000 tons launched by Guangxi Nonferrous Metals Group in Wuzhou Recycling Resources Processing Park. As China’s increasing dependence on foreign supplies for copper, bauxite and lead-zinc endangers the development of industries, the secondary nonferrous metals industry has gained great popularity. Industry insiders expect China’s output of secondary nonferrous metals to hit 12 million tons during the 12th Five-year Plan period.

In recent years, along with rapid economic development and urbanization, demand for nonferrous metals has been rising sharply in China.However, nonferrous metal resources are relatively scarce, and copper, aluminum, lead and zinc are in serious short supply. Gigantic imports are needed to meet domestic demand.

According to data from China Customs, in September China imported 4.478 million tons of bauxite, up 44.59% year on year from 2010,and 1.6 million tons of lead concentrate, increasing 13% from the previous month. In October, China imported 517,097 tons of copper concentrate, with a YOY rise of 10% from last year.

As imports grow, China’s foreign dependence for copper, aluminum, lead and zinc is rising year by year. According to industry insiders, at present 60% of copper and bauxite supplies in China come from imports, the figure for lead and zinc is around 55%, and the numbers are climbing.

At 2011 East China Copper Industry Forum,Xu Zhongbo, the president of Shanghai Qiyi Industrial Co., Ltd., explicitly noted that if copper price was manipulated by foreign corporations China would be forced to import copper at a high price.

Analysts are also of the view that rising foreign dependence will pose a significant threat to China’s nonferrous metals industry, and domestic enterprises should actively explore other approaches to reduce industry risks.

Against such background, there is an urgent need to develop the secondary nonferrous metals industry. It is learned that in the secondary nonferrous metals industry enterprises utilize advanced production technology and process equipment to utilize scrap nonferrous metals.While fulfilling energy conservation and emission reduction targets, they promote the sustainable development of nonferrous metals industry.

Due to the above merits, China issued favorable policy towards the industry. Enterprises have stepped up investment in secondary nonferrous metals. In May last year, the State Development and Reform Commission and the Ministry of Finance started to build urban mining demonstration bases in seven regional resource recycling parks including Sichuan-based Southwest Renewable Recourses Industrial Park. By the end of last year, the seven bases had produced 695,000 tons of secondary copper, 359,000 tons of secondary aluminum and 328,000 tons of secondary lead.

By and large, China’s secondary metal industry has experienced rapid development in recent years. It is learned that in 2006 output of four main secondary nonferrous metals (copper,aluminum, lead and zinc) was merely 4.53 million tons; in 2010, output of main secondary nonferrous metals rose to 7.75 million tons in China, taking up some 25% in the total output of nonferrous metals.

Data show that from January to September this year, output of main secondary nonferrous metals came to about 5.86 million tons in this country. Wang Jiwei, secretary-general of the

Secondary Metal Committee of China Nonferrous Metals Industry Association, expects China’s output of secondary metals to hit 8 million tons in 2011, up 3% from last year.

At the 11th Secondary Metals International Forum/Exhibition & Trade Fair, Chen Quanxun,chairman of China Nonferrous Metals Industry Association, pointed out that now China’s nonferrous metals industry is coming under growing resource and environmental pressures. According to Chen, efforts to recycle nonferrous metals are far from enough, and during the 12th Five-year Plan period China will provide strong support for the secondary metal industry. He expects China’s output of secondary nonferrous metals to reach 12 million tons in 2015.