The development of our Non-ferrous metal industry

I. Industrial operation in 2019

From January to November 2019,53.31 million tons of Non-ferrous metal were produced, an increase of 3.9 percent year-on-year. Of this total, 8.88 million tons of refined copper was produced, up 10.8 percent year-on-year, and 32.13 million tons of primary aluminum was produced, down 0.6 percent year-on-year. The output of six kinds of concentrate metals was 5.36 million tons, down 0.6 percent year-on-year, while alumina production was 66.49 million tons, down 0.7 percent year-on-year. Copper production was 17.75 million tons, up 10.7 percent year-on-year, while aluminium production was 46.14 million tons, up 6.0 percent year-on-year.

In terms of profits, 8,040 Non-ferrous metal industrial enterprises made a total of 125.33 billion yuan in the first 11 months of 2019, up 0.3 percent from the same period last year. Of this total, the profits of independent mining enterprises were 21.67 billion yuan, down 29.6 percent year-on-year; those of smelting enterprises were 49.30 billion yuan, up 0.2 percent year-on-year; and those of processing enterprises were 54.36 billion yuan, up 20.8 percent year-on-year.

From the price situation, January-november 2019, the domestic market copper, aluminum, lead, zinc, four metal spot average price compared with the same period last year fell. The average copper spot price was 47,665 yuan per ton, down 6.3 percent from a year earlier. The average aluminum spot price was 13,933 yuan per ton, down 2.7 percent from a year earlier. The average lead spot price was 16,761 yuan per ton, down 12.5 percent from a year earlier The average spot price of zinc was 20,663 yuan per ton, down 13.3 percent year-on-year. 

Although the development of our Non-ferrous metal industry has remained basically stable, we still face many challenges.

First, the quality benefits of development is not high. At present, the quality and efficiency of our Non-ferrous metal industry development are quite prominent. In 2018, the profit margin of the main business income of enterprises above industry size was only 3.3% , which was lower than the national average level of 3.2 percentage points for enterprises above industry size; and the profit margin of assets was only 3.9% , it is 2 percentage points lower than the national average level of large-scale industries.

Second, the ability of independent innovation is insufficient. Although our country has made great achievements in technological innovation in the Non-ferrous metal industry, it is mainly local engineering innovation rather than systematic primitive technological revolution, there is still an obvious gap between the systematic innovation ability of industry and that of developed countries. The modernization of Non-ferrous metal industry since the reform and opening-up policy has actually been pushed forward in the opposite direction, with the aim of “Short-term development and rapid development”. However, basic research and basic innovation capacity have not been strengthened, in particular, key basic materials, advanced basic technology, industrial technology, core basic components are still the most prominent constraints on the development of the industry.

Third, increasing pressure on resources and the environment. With the continuous expansion of production scale, the contradiction between industrial development and domestic resource carrying capacity is increasingly prominent. In the resource aspect, because of the continuous high-intensity exploitation, the domestic resources such as tin and antimony have lost their advantages, and begin to rely on import The mining grade of lead and zinc is declining and the cost is rising inevitably. In the aspect of ecological environment, we should do a good job in defending blue sky, Blue Water and Pure Land, speed up ecological protection and restoration, and form a hard constraint on industrial development. To meet the requirements of the special emission limit, not only a large amount of investment, and some even lack of technical support for industrialization. China's Non-ferrous metal industry is faced with the dual task of preventing and controlling new sources of pollution and solving the problems left over by historical pollution.

Fourth, the allocation of factors to be optimized. At present, the most prominent problem facing the development of our Non-ferrous metal industry is that the industrial structure is unreasonable, and the development is unbalanced and uncoordinated, which has become the main contradiction restricting the high-quality development. Through the adjustment of factor allocation, we can optimize the stock, guide the increment and actively reduce the quantity, we will address overcapacity, liquidate zombie enterprises, promote mergers and restructuring, optimize industrial distribution, reduce debt risks, innovate development models, and push forward structural adjustment, remains a top priority for the Chinese Non-ferrous metal industry.

Second, the expected indicators of industrial development in 2020

As our economy has moved from a phase of high-speed growth to a phase of high-quality development, the development environment for the Non-ferrous metal industry has undergone significant changes, and the phase of sustained growth in major Non-ferrous metal consumption has come to an end, demand began to enter micro-growth, or even“Zero growth” of the platform period, capacity expansion of the“Ceiling” formation. Judging from current domestic and international macroeconomic developments, the momentum of global economic growth will weaken in 2020, uncertainties in international markets will increase, growth momentum of major developed economies will slow down, and downside risks to the global economy will increase.

Therefore, on the premise that there is no“Black Swan” event. Make the following prediction judgments on the main indicators of our Non-ferrous metal industry:

First, Non-ferrous metal production has been running smoothly overall, with growth in industrial value added ranging from 4% to 5% , and production of Non-ferrous metal metals rising from 3% to 4% .

Second, the prices of major Non-ferrous metal continue to be volatile, but a substantial reduction is unlikely due to the rigid increase in costs, and there is a relatively adequate supply of Non-ferrous metal in both domestic and foreign markets, new growth points in the consumer sector to be nurtured, supply and demand relationship is difficult to support a sustained rebound in prices.

Third, the profits of enterprises are expected to maintain the momentum of growth, in particular, the pace of structural adjustment of advantageous enterprises has been accelerated and the profitability has been further strengthened, which has become the main driving force for the growth of industrial profits; however, smes are in a difficult position, making it harder for industry profits to keep growing.

Fourth, the pattern of decline in fixed asset investment in the Non-ferrous metal sector is still difficult to fundamentally change. First, there is overcapacity or saturation in Non-ferrous metal smelting and common processing projects; The second is the lack of basic research and high-tech projects, the third is the increase in environmental investment, and the fourth is the difficulty and high cost of financing Non-ferrous metal projects Fifth, trade protectionism has spread from trade to investment. In this case, the enterprise lack of investment enthusiasm.

Fifth, the impact of trade frictions between China and the US on exports has become more apparent. With the intensification of international trade frictions, it is very difficult to expand Non-ferrous metal exports.

Third, the main tasks of industrial development in 2020

In order to achieve the steady development of the industry, the Non-ferrous metal industry needs to focus on the following areas in 2020.

First, improve the basic capacity of industry. At present, the technology and equipment of our country's Non-ferrous metal industry in every link of the industrial chain, such as mining, smelting and processing, are all first-class in the world. But because of the systematic software, that is, the key technology linking each link is weak, the industry can not form a systematic advantage. In 2020, the industry will carry out work in this regard, and strive to identify several key nodes, and strive to break through as soon as possible, and comprehensively enhance the basic capacity of the industry.

The second is to break the bottleneck of independent innovation. The main body of industry independent innovation is the enterprise, only the enterprise can realize the engineering of Science and technology, but the university, scientific research unit and so on lack the ability of the engineering of Science and technology, can only provide the related service for the enterprise. Therefore, the national science and technology industrialization investment must be tilted to the entity enterprise, which is the key to break the bottleneck of independent innovation. In 2020, the Non-ferrous metal industry will actively explore aerospace materials, List of semiconductor materials, etc. , with a view to making progress in a number of key sectors.

Third, foster new economic growth points. Since the 12th five-year plan, the Non-ferrous metal industry has taken expanding application as a new growth point to address overcapacity and promote industrial development, great achievements have been made in the fields of lightweight automobile, building formwork, aluminum structure furniture and so on. In 2020, the industry will continue to focus on expanding the application of Non-ferrous metal technology to foster new economic growth points of the industry.

Fourth, enhance the vitality of enterprises. The current development of our Non-ferrous metal industrial enterprises is characterized by the fact that the industry leaders have become world leaders in terms of scale of production and operation, and have formed an influence in international competition, but it is far less profitable than world-class companies. The majority of small and medium-sized enterprises in the fierce market competition in the homogeneous development of outstanding issues, difficult situation.

Therefore, in 2020, the Non-ferrous metal industry will launch a group of small and medium-sized enterprises to follow the “Specialized, refined, special and new” development path, and seek policy support from the state, this is an important link to enhance enterprise vitality. Fifth, we will open wider to the outside world. The Non-ferrous metal industry is one of the leading industries for our country to “Go out” and “Bring in” and has made important achievements in its open development.