Striking Economic Performance Made in Nonferrous Industry in The First Half of The Year

In August,Beijing,China Nonferrous Metals Association convened the press conference on economic performance made in nonferrous industry,during which Jia Mingxing,standing committee member of the Communist Party,Vice Chairman and Secretary-General of the Association gave speech on overall situation.

According to Jia Mingxing,in the first half,our nonferrous industry gained progress while maintaining stability in economic performance and achieved improvements in operation quality.Features are mainly reflected in below five aspects:

Firstly,production of nonferrous metals is in steady increase.In the first half,output of ten nonferrous metals in common use was 32.549 million tons,presenting a YOY increase of 11% and a two-year average growth of 7%.

Secondly,investments in fixed assets are in recovery growth.After several years of decline,investments in fixed assets in nonferrous industry presented a YOY increase of 15.7% in the first half and a twoyear average growth of 2.9%.Specifically,fixed assets investment in mine dressing presented a YOY increase of 12% and fixed assets investment in smelting and pressing resented a YOY increase of 16.5%.

Thirdly,principal metal varieties,such as copper and aluminum,presented a YOY increase in import-export volume and some ups and downs in import-export amount.In the first half,import volume of copper concentrate of our country was USD 25.7 billion,up by 58.2% on a YOY basis;import volume of bauxite was USD 2.48 billion,down by 9% on a YOY basis.In the first half,import volume of unwrought copper and copper materials of our country was USD 25.32 billion,up by 48.1% on a YOY basis;import volume of unwrought aluminum and aluminum materials of our country was USD 8.33 billion,up by 32.5% on a YOY basis.

Fourthly,in the first half,price of nonferrous metals hit a historical high,followed by a pull-back from high in June.In the first half,LME three-month copper price reached as high as the new record of USD 10,747/ton.In the first half,average copper price in domestic spot market was RMB 66636/ton,up by 49.2% on a YOY basis.Average copper price in domestic spot market in the middle of May was as high as RMB 74953/ton,followed by a pull-back to RMB 68032/ton in late June,presenting a pull-back of RMB 6921/ton,i.e.9.2%.

In the first half,average aluminum price in domestic spot market was RMB 17421/ton,up by 31.6% on a YOY basis.Average aluminum price in domestic spot market in the middle of May was as high as RMB 19702/ton,followed by a pull-back to RMB 18735/ton in late June,presenting a pullback of RMB 967/ton,i.e.4.9%.

Fifthly,nonferrous companies above designated scale hit a new high in realized profit and achieved improvements in economic operation.In the first half,nonferrous companies above designated scale(including independent gold companies)achieved total profit of RMB 163.97 billon,up by 224.6% on a YOY basis (based on comparable caliber,the same below),and up by RMB 35.66 billion compared to the first half of 2017,and a four-year average increase of 6.3%.

In late June,asset-liability ratio of nonferrous companies above designated scale was 60.6%,narrowed by 2.8 percent points compared to the same period of 2017;in the first half,operating profit margin was 4.82%,expanded by 1.03 percent points compared to the same period of 2017;ROA was 7.99%,expanded by 1.03 percent points compared to the same period of 2017.

When asked about the second half of the year,Jia Mingxing holds a positive view on nonferrous industry development that steady progress and favorable operation will be further extended.

He gave his analysis that from the perspective of global economy,in the second half,economic growth will be further boosted globally and developed economies are still going to keep ahead in recovery,accompanied by increased uncertainties in epidemic control due to virus variations.Ascending global inflation is leading to rising expectations for normalization of monetary policies in major economies.

From the perspective of economic pattern in our country,progress in domestic consumption and investment increase will further be extended,and supporting power driven by domestic demands will further be upgraded.Therefore,in the second half,uncertainties caused by external environmental influences are still the biggest factors affecting China’s economic development.

Overall speaking,taking into consideration domestic and overseas macroeconomic environment and combining “trinity system”index report prepared and issued by the Association,it is estimated that steady progress and favorable operation will be further extended in nonferrous industry in the second half of 2021,on the premise of no incidents of “black swan” events.

According to Jia Mingxing,he made below predictions on major indicators of nonferrous industry for the second half and the whole year:1.Production of nonferrous metals will keep climbing up steadily while YOY increase will be narrowed down a bit,ending up with an annual increase of around 5%.2.Price of principal nonferrous metals will be pulled back from high level.In terms of mid-to-long run,it is rather difficult for us to have a “supercycle” of continuous rise for copper price due to lack of driving forces;as policies on carbon emission take effect and fundamentals of supply and demand make progresses,aluminum price will be likely to perk up.3.Realized profits in Q3 and Q4 will likely to fall a bit compared to Q2,while total realized profits in the whole year are still expected to hit a new high.4.The increase in investments in fixed assets in nonferrous industry will be likely to gradually narrow down,while the annual increase is still expected to realize positive growth.5.Export of nonferrous products is expected to maintain the level in the first half or even surpass that level.