China Nonferrous Metals Association Convened Press Conference On The Operation Of Nonferrous Industry In 2020

At the end of January,China Nonferrous Metals Association convened press conference on the operation of nonferrous industry in 2020.Jia Mingxing,Vice President and Secretary-General of the Association,introduced overall situation and answered reporters’questions.Mr.Jia told us that,in the face of unexpected COVID-19 outbreak in 2020,the industry and the companies actively carried on returning to work and restarting of operation,while doing their best in epidemic prevention and control.Nonferrous industry dipped in Q1,then it demonstrated a little recovery trend.Generally speaking,operation situation in 2020 was obviously better than expected.What’s more,in this industry,the production,effectiveness,and average annual price of copper and aluminum outperformed those of the previous year.

1.General operation situation in nonferrous industry in 2020 was better than expected

Jia Mingxing analyzed overall operation situation in nonferrous as his beginning:1.In 2020,the production of our 10 types of nonferrous metals passed the 60 million tons mark for the first time,which is 61.68 million tons,presenting a YOY increase of 5.5%.2.The drop in fixed assets investment in 2020 was gradually narrowed.There was a YOY drop of 1.0% in total fixed assets investment done by our nonferrous industry(including independent gold companies).Specifically,YOY drop in Q1 was 11.4%; YOY drop in first half year was 8.9%; YOY drop in the first three quarters was 7.0%.3.In 2020,there was significant increase in the import of non-forged copper and copper material,and there was a drop in the export of non-forged aluminum and aluminum material and rare earth.4.The average annual price of copper and aluminum in spot market in 2020 rose back to the level higher than the previous year.5.Principal financial indicators of nonferrous companies above designated scale were much better than expected in 2020.Operating income of nonferrous companies(including independent gold companies)above designated scale achieved RMB 5826.65 billion in 2020,presenting a YOY growth of 3.8%; they achieved total profit of RMB 183.32 billion,presenting a YOY growth of 19.2%.

2.During “the 13th Five-Year Plan”,nonferrous Industry saw a steady rise in production and a steady fall in investments

When reviewing the development of nonferrous during “the 13th Five-Year Plan”,Jia Mingxing told us that the industry saw a steady rise in production and a steady fall in investments.Profitability of companies above designated scale in this industry rose back in 2020 to the level higher than 2018 and 2019.

Features are as follows:1.During “the 13th Five-Year Plan”,production of our 10 types of nonferrous metals enjoyed a steady rise with an average annual growth of 3.6%.2.During “the 13th Five-Year Plan”,total fixed assets investments done by nonferrous industry presented a steady fall with an average annual decrease of 2.6%.3.During “the 13th Five-Year Plan”,we saw a significant increase in imported copper,aluminum mine raw material and copper smelting products.4.At the end of 2020,in SHFE,closing price of copper futures and aluminum futures of the last three months was the highest year-end closing price during “the 13th Five-Year Plan”,and the average price of copper and aluminum in domestic spot market was the third highest during “the 13th Five-Year Plan”.5.During “the 13th Five-Year Plan”,in 2020,nonferrous companies above designated scale presented a significant rise in their corporate profit after consecutive decrease in 2018 and 2019.

3.Nonferrous industry is likely to maintain its positive trend in 2021

When talking about the trend in 2021,according to Jia Mingxing,from the perspective of international macro environment,it is estimated that the epidemic is still likely to influence global economy in the first half year.The invention of vaccine will hopefully restrain the epidemic.Therefore,it is estimated that global economy is going to recover in the second half year.In addition,we also face some elements like swift evolvement of international political and economic pattern,regional polarization in cross-border direct investment,coexistence of crisis and opportunities in multilateral economic and trade systems,and reconstruction of global industrial chain.Overall speaking,major countries in the world are going to recover in 2021,still suffering obvious risks though.

From the perspective of macro environment at home,the year of 2021 is going to be the opening year of the “14th Five-Year Plan”,when we need to continue to boost domestic demands,support innovative development and improve business environment.Besides,there is the factor of low base.As a result,economic growth is likely to recover to above normal level.As for macro policies,positive fiscal policies continue to prevail in 2021.Monetary policies attach greater importance to accuracy and flexibilities to advance the upgrading of consumption transformation and quality and efficiency improvement of investments,so as to enhance cooperative development of innovations and industries.However,we still need to be alerted that there are uncertainties in domestic and foreign political and economic environment.

Considering domestic and foreign macro economic environment and “Trinity”boom indicator report prepared and published by nonferrous industry,we might predict that nonferrous industry will enjoy an overall growth trend featuring “robustness first,followed by steadiness” in 2021,under the premise of going without “Black swan”incidents.

According to Jia Mingxing,there are some predictions about major indicators of nonferrous industry in 2021:1.Production of nonferrous industry holds steady,with an annual growth of about 3%; 2.It is estimated that the price of nonferrous metals will fluctuate violently in the first half year.But possibilities still exist that there will be a fall in price in the second half.On the whole,average annual price will outperform that of 2020; 3.The achieved profit of nonferrous companies above designated scale is likely to keep growing; 4.Fixed assets investments in nonferrous industry are on par with those of 2020.We are not likely to see significant increase or decrease; 5.The fall in export of nonferrous metals will be eased a bit but no big possibility to sharp rebounding.