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MIIT: The Nonferrous Industry In China Scored A Profit Of RMB 28.92 Billion In Q1 2019

According to public information of the Ministry of Industry and Information Technology (MIIT), in Q1 2019, thenonferrous industry in China realized stable operation, enhanced industry confidence and mitigated performance decline.

First, the production was basically stable. In Q1 2019, the production of 10nonferrous metals in China reached 13.7 million tons, up by 6.3% YoY; specifically, the production of copper, aluminum, lead and zinc reached 2.05 million tons, 8.57 million tons, 1.43 million tons and 1.31 million tons respectively, change by 8.8%, 4%, 32.6% and -5.1% YoY; the production ofcopper products and aluminium products reached 3.66 million tons and 10.4 million tons respectively, up by 14.4% and 10.2% YoY.

Second, the industry confidence was enhanced. Driven by relevant favorable policies on tax and fee reduction proposed in the report on the work of the government, the nonferrous market confidence was enhanced. Specifically, in March 2019, the average spot prices of copper, aluminum, lead and zinc were RMB 49,702 yuan/ton, 13,803 yuan/ton, 17,166 yuan/ton and 22,495 yuan/ton, up by about 3% compared with those in January 2019 (except lead); the business confidence index published by China Nonferrous Metals Industry Association (CNIA) terminated the decline for consecutive 3 quarters and increased by 0.8 percentage points in Q1 2019 QoQ.

Third, the performance decline slowed down. In Q1 2019, the nonferrous industry in China realized a profit of RMB 28.92 billion, down by 13.6% YoY; however, with the slight recovery of the main consumption market since March 2019, the industry performance decline slowed down, with the profit decline rate down by 18.6 percentage points compared with that during January-February 2019. Specifically, the mining and beneficiation industry and smelting industry realized profits of RMB 8.39 billion and 8.75 billion respectively, down by 15% and 30% YoY; the aluminum smelting industry reduced loss by RMB 480 million compared with that during January-February 2019 thanks to certain capacity shutdown and cost decrease of carbon and aluminium oxide; the processing industry terminated the performance decline since the end of 2018, and realized a profit of RMB 11.78 billion in Q1 2019, up by 6.1% YoY.

Fourth, the investment continued to decline. In Q1 2019, the investment in the nonferrous industry in China declined by 15.1% YoY. Specifically, the investment in mining and beneficiation declined by 5.9% YoY due to mine rectification; and the investment in smelting and processing declined by 17.1% YoY due to resource constraints and downstream consumption reduction.

Fifth, the increase rate of export of aluminium products declined. In Q1 2019, the export of aluminium products in China reached 1.28 million tons, up by 13.1% YoY, the increase rate declined by 7.4 percentage points YoY; the accumulated export value reached USD 3.5 billion, up by only 3.9%; and the unit price of exported aluminium products declined by 8.1% YoY, showing an obvious trend of volume increase and price decrease.