Imports of non-ferrous metal raw materials in China increased

Non-ferrous metals Faced with the complex and volatile international economic situation, the downward pressure on the domestic economy, the unfavorable market conditions, low product prices, and financial market turmoil, the import and export volume of non-ferrous metals in China increased significantly in 2015. . In 2015, China’s import and export of non-ferrous metals was 145 million tons, an increase of 12.7324 million tons from 2014, an increase of 9.6%, and the growth rate was 38.25 percentage points higher than that of 2014.

In 2015, the import and export of non-ferrous metals in China presented the following features:

Imports and exports increased compared to 2014, and the monthly growth stabilized

In 2015, China imported 135 million tons of non-ferrous metals, an increase of 11,611,300 tons from 2014, an increase of 9.39% year-on-year, and an increase of 39.99% from the contrarian trend in 2014. Exports of 10.19 million tons, an increase of 1.12 million tons compared with 2014, an increase of 12.37%; a decrease of 1.67 percentage points from 2014. In January 2016, China imported 10.885 million tons of non-ferrous metals, an increase of 38.5% year-on-year. Among them, exports reached 793,000 tons, a year-on-year decrease of 5.49%; imports of 101.921 million tons, an increase of 43.71%.

From a monthly perspective, except for the import volume of imports of less than 10 million tons per month in the first quarter, the monthly imports in other months hovered at 12 million tons. The export volume is relatively limited, and the monthly export volume is maintained at about 800,000 tons, which is less than 10% of the import volume. Judging from the growth rate, the import and export at the beginning of the year had a relatively large negative correlation. In the second quarter, the growth rate converged and then slowly differentiated.

Average export prices held steady and import prices fluctuated

Since 2015, China's average non-ferrous metal export price was 19,526.34 yuan/ton, a decrease of 13.36%. From the monthly average export price, China’s average non-ferrous metal export price was the highest in January, reaching 24,999.24 yuan/ton, and dropped to 17,706.64 yuan/month in August/ Tons, the lowest price for the year. In January 2016, the average export price was 17,944.44 yuan per ton, a year-on-year decrease of 18.43%. The average import price increased significantly. In 2015, the average import price increased by 59.6%. The average import price in January reached 1,0783.4 yuan/ton, an increase of 223.68%, and the price and growth rate reached the highest in the year. The average import price in January 2016 was 6779.8 yuan/ton. The year-on-year decrease was 37.12%.

General trade dominates, import and export increase, customs import and export of special supervision areas are decreasing

In 2015, China imported 118 million tons of non-ferrous metals in general trade, an increase of 11.7% year-on-year, accounting for 87.38% of China's total non-ferrous metal imports during the same period. During the same period, the import of 2,834,800 tons of goods under the special supervision of the Customs, a year-on-year decrease of 18.26%, accounting for 2.09%.

In 2015, China exported 567.29 million tons of non-ferrous metals by general trade, which was an increase of 3.33% year-on-year, accounting for 55.68% of China's non-ferrous metal imports during the same period. During the same period, imports of 334,600 tons were handled by the special customs supervision of the customs area, a year-on-year decrease of 37.08%, accounting for 3.28%.

Imports of non-ferrous metal ore products increased significantly

In 2015, imports of nonferrous metal ore products increased significantly. In 2015, China's imported aluminum ore and its concentrates totaled 55.692 million tons, an increase of 54.01% year-on-year. It accounted for 51.76% of all non-ferrous metal imports in China, and imported copper ore and its concentrate 13.283 million tons, an increase of 12.54% year-on-year. The proportion of all non-ferrous metal imports in China accounted for 12.35%. In terms of exports, the export of unwrought aluminum and aluminum products was 4,670,800 tons, an increase of 9.81% year-on-year, accounting for 43.32% of all non-ferrous metal exports in China.

High concentration of import sources, relatively scattered export markets

China's non-ferrous metal imports are mainly concentrated in the Philippines, Australia and Malaysia. In 2015, China imported 346.993 million tons of non-ferrous metals from the Philippines, a decrease of 5.78%, accounting for 25.67% of China's total non-ferrous metal imports during the same period. It imported 27.436 million tons and 24.521 million tons respectively from Australia and Indonesia, accounting for 20.24% and 18.14. Among them, imports from Malaysia increased 529.76% year-on-year. The top three import markets accounted for 64.06% of the total. The top three markets for exports were Hong Kong, the United States and Vietnam. The total exports of the three countries accounted for 39.54%.

Private enterprises and other enterprises are the main entities of import and export enterprises

In 2015, China's private enterprises and other enterprises imported 61.15 million tons of non-ferrous metals, an increase of 9.36%, accounting for 45.25% of China's total non-ferrous metals imports; exports of 6.7042 million tons, an increase of 14.9%, accounting for 64.49% of China's total exports of non-ferrous metals . The foreign-invested enterprises took the next place, importing 37.853 million tons, an increase of 13.7%, accounting for 28%; exports of 2.329 million tons, an increase of 4.95%, accounting for 22.86%.

China's 2015 import of non-ferrous metals increased by 11.6111 million tons from 2014. Among them, the contribution rate of aluminum ore and its concentrate to imports increased by 168%, followed by gold and silver, the contribution rate of the two was 23.82%, again copper and zinc, and the contribution rate of both was 19.7%.

The reason why the import and export of non-ferrous metals in China has increased

Increased export of aluminum semi-finished products leads to large demand for aluminum ore

In 2015, China imported aluminum ore mainly from Malaysia (42.86%) and Australia (35.15%). The policy of restricting exports in Indonesia led domestic aluminum companies to shift alternative sources of supply for minerals to Malaysia, Australia, and India. The 2014 ore export ban was in force in Indonesia, and Chinese aluminum companies still need a lot of aluminum ore in order to increase the export of aluminum semi-finished products. In order to meet China's demand, the development of bauxite in Malaysia has increased rapidly. In 2015, China imported aluminum ore and its concentrates from Malaysia increased by 638.38%.

However, due to the prosperity of bauxite exports and the lack of strict environmental supervision, the environment in Malaysia has been greatly affected. In 2016, the Malaysian federal government and provincial government may issue policies to restrict the export of bauxite to protect the domestic environment.

Lower exchange rate is another reason for the increase in the import and export of non-ferrous metals

China's import and export of non-ferrous metals in the contrarian trend in 2015 is not due to actual demand. In 2015, the central bank continued to induce a downward adjustment of the exchange rate through the midpoint of the exchange rate. In 2015, the median price of *** was reduced by 3746 points, a drop of about 6.12%. *** Unprecedented, substantial devaluation triggered market panic, leading to hedge funds pouring into non-ferrous metals, especially precious metal bullion.

At the same time, in anticipation of the lower exchange rate of ***, non-ferrous metal traders will replenish inventory. Domestic market participants will use the "arbitrage window" to compare the price difference between the London Metal Exchange (LME) and the Shanghai Futures Exchange Metal Co., Ltd. in Shanghai. The futures exchange established a long position, a variety of factors leading to a substantial increase in imports of non-ferrous metals. In February 2016, the copper stocks of the designated delivery warehouses reached 279,900 tons, which exceeded the 298,500 tons of LME stocks during the same period.

*** Lower exchange rates make dollar-denominated commodities more expensive for China, and the recovery of non-ferrous metals (copper, nickel, aluminum, zinc, etc.) has a direct relationship with the lower exchange rate, traders, and investment. Everyone is trying to reserve a large amount of non-ferrous metals before further devaluation.

China's non-ferrous metals import and export still face problems

Basic industrial metals enter the stage of restructuring and rebalancing, supply side reform accelerates production capacity clearing

From the perspective of the downstream demand for base metals, the focus of investment growth in the transition period has shifted downwards, and the economy is experiencing a period of new platform bottoming. The demand is to be stabilized. The supply and demand of commodities in the fourth quarter further weakened, especially the economic downside risks. China's demand concerns are hard to eliminate. At the same time, the "supply side" reform and the industry's spontaneous supply contraction are expected to accelerate the clearing of traditional production capacity.

It is reported that 14 backbone aluminum electrolysis companies promised to stop restarting production capacity, and further increase the scale of flexible production. They also promised that the completed production capacity will not be put into operation for at least one year.

In the second half of 2015, the aluminum production capacity reduction area will further expand. The annual net new production capacity will be 1 million to 1.5 million tons, which is significantly lower than the new production capacity of 4 million to 430 tons from 2013 to 2014. According to preliminary statistics, the reduction in output of electrolytic aluminum in 2015 reached 4.91 million tons/year. In 2016, the industry will continue to accelerate the elimination of traditional production capacity through spontaneous supply contraction.

Shortboard of Technological Innovation Becomes the Bottleneck of Restricting the Development of Non-ferrous Metal Industry

1 Technical reserves and process control are behind

According to data released by the China Nonferrous Metals Industry Association, the industrial added value of non-ferrous metals enterprises in China increased by 11.7% in 2015, which was 5.6 percentage points higher than the industrial added value of industrial enterprises in China. At the same time, the output of ten non-ferrous metals was 50.9 million tons, a year-on-year increase of 5.8%, and the growth rate was down by 1.4 percentage points.

Among them, the output of refined copper, electrolytic aluminum, lead, and zinc were 7.96 million tons, 31.41 million tons, 3.86 million tons, and 6.15 million tons, respectively, a year-on-year growth of 4.8%, 8.4%, -5.3%, and 4.9%. The production of non-ferrous metals enterprises is generally stable, but industry investment and profits have declined. In terms of investment, the non-ferrous metals industry (including independent gold companies) completed a fixed asset investment of 761.7 billion yuan, a year-on-year decrease of 3.2%, which has dropped for the first time in recent years. The industry's profits declined significantly. The average annual spot prices of copper, aluminum, lead and zinc decreased by 16.8%, 10.2%, 5.5%, and 4.1% year-on-year, respectively. Non-ferrous metals industry enterprises above designated size achieved profits of 179.9 billion yuan, a year-on-year decrease of 13.2%. % of business losses.

The existence of some technical innovation shortcomings in domestic non-ferrous metal enterprises is an important cause of the passive development of the industry, and it is facing double pressures of rising cost rigidity and falling metal prices.

2 Key materials have not been domesticated

With the development of new projects for nuclear power in Pakistan in 2015, Argentina, Romania, and South Africa, overseas development has ushered in an important turning point. Although the localization rate of nuclear power in China has been steadily increasing, the key material of nuclear power cores as its “heart” has not yet been domesticated, and has become an important factor restricting China’s nuclear power “going out strategy”.

The technical reserves of China's non-ferrous metal application industries are lacking, and the level of industrial process control is lagging behind. It is difficult for nuclear power core materials to rely on imported materials to change significantly in the short term, which will be the bottleneck restricting the development of China's non-ferrous metals industry in the future.

Opportunities for the Development of Non-ferrous Metals in China

Small metal new materials at the helm of the new development direction

In 2015, the sub-divisions of non-ferrous metals were significantly different, and the growth rate of small metal and new material related plates represented by “lithium” was significantly higher than the industry average. As an important basic link for industrial transformation and upgrading, the rapid expansion of new application areas and the reduction of production costs have made the application of small metal new materials more and more commoditized, and the growth space has been further opened.

As the most widely used lithium new energy vehicle in the domestic production and sales continued to exceed expectations in 2015, the annual output is expected to reach 350,000 vehicles. In 2015, new energy vehicles were arrogant, but in January 2016, the production and sales of new energy vehicles quickly dipped, which was 84% ​​lower than that in December of last year. However, in the long term, the development trend of new energy vehicles is undeniable, and the demand for new energy vehicles' lithium battery is indispensable. Significant increase in the proportion, the industry demand pattern will be further improved.

The "One Belt and One Road" strategy promotes the development of the nonferrous metal industry

China's equipment and technology base in the non-ferrous metal mining, smelting and partial processing industries are strong and have high cost-effectiveness. They are sought-after goods in the international market. Developed countries are also willing to use the Chinese equipment and low-cost advantages to jointly develop third-party markets. By actively responding to the "One Belt and One Road" development strategy proposed by the state, the non-ferrous metal industry has become the most capable force for steady growth and structural adjustment, and continues to promote China's major equipment and advantageous production capacity to 'go global'.

In addition, companies with early transition and rapid transformation in the industry can rely on excellent technologies and products, can form a win-win cooperation model with other companies, and carry out equipment and technology group output on a global scale. The promotion of the “One Belt and One Road” strategy in 2016 will have a positive effect on non-ferrous metals.

Export policy favors rare earth trade

Export quotas were officially canceled, stimulating recovery of overseas demand. The Ministry of Commerce and the General Administration of Customs announced the 2015 Catalogue of Goods Subject to Export Licensing, clarifying the administration of export licenses for the implementation of rare earth exports, and the export quota was formally cancelled.

Since the implementation of the quota system, the export volume has been suppressed, falling from the highest historical 50,000 tons to 10,000 to 20,000 tons. Due to the fact that foreign rare earth stocks are in a low inventory state, the quota liberalization will help increase export growth. It is expected that rare earth prices will enter the upstream channel in 2016.

China's non-ferrous metal industry is generally at the low-end link of the international industrial chain of work. The task of industrial restructuring is imminent. Therefore, it is necessary to clarify the direction of further development of the non-ferrous metal industry, rely on technological innovation, accelerate technological transformation, develop deep processing, and encourage enterprises to accelerate the pace of technological transformation. Enhance the support for the development of high-end products such as aluminum for aviation, titanium for marine use, zirconium for nuclear power, and new-generation information technology functional materials, and achieve leapfrogging in the transition to high-end industries.

With the "13th Five-Year Plan", the "One Belt and One Road Initiative", the coordinated development of Beijing-Tianjin-Hebei, the construction of the Yangtze River Economic Belt and other national strategies, and the implementation of "Made in China 2025," and the introduction of a series of stable growth measures, it will be a nonferrous metal industry. To expand new development space and increase new development momentum, but under the pattern of weak growth in the global economy, the market demand for non-ferrous metal products is unlikely to increase significantly. (Author: China Haitong Research Institute)