Non-ferrous metal industry:

  "Strengthen the muscles and bones" in "Being Happy"

  As an indispensable basic material and important strategic material for the development of the national economy, the development trend of the non-ferrous metal industry in 2021 can be described as "joyful".

"From January to November 2021, the output of 10 commonly used non-ferrous metals reached 59.107 million tons, an increase of 6.3% year-on-year. Total fixed asset investment increased by 6.9% year-on-year. Non-ferrous metal enterprises above designated size realized profits of 34.10 billion yuan." , Said Ge Honglin, party secretary and chairman of the China Nonferrous Metals Industry Association.

  In 2021, the output of the non-ferrous metal industry and corporate profits have been gratifying, and the industry's green and low-carbon transformation has also made positive progress.

In 2022, the industry still has huge potential to be tapped, and it still needs to expand new space in accelerating high-quality development.

  Price hikes and profits hit a record high

  From the perspective of the development trend, the development of the non-ferrous metal industry in 2021 presents the characteristics of "prices, attention, and participation".

  In 2021, the prices of many commodities such as copper and aluminum hit a record high.

Copper is a key basic raw material for the development of energy and new industries. Copper prices showed a rapid upward trend in the first half of the year and reached a record high of US$10,724.50/ton on May 10, 2021.

As of November 2021, the LME (London Metal Exchange) average current-month and three-month copper prices were US$9765/ton and US$9,594/ton respectively, up 38.25% and 35.54% year-on-year.

At the same time, in 2021, the prices of non-ferrous metals such as aluminum and zinc in the domestic market reached historical highs of 24,765 yuan/ton and 27,720 yuan/ton respectively.

  Judging from the 2021 third quarter report of listed companies, the performance of the industry's leading companies is really gratifying.

Five listed companies, Jiangxi Copper, Tongling Nonferrous, Yunnan Copper, Zijin Mining, and Baiyin Nonferrous, whose main businesses are copper, achieved a total sales revenue of 750 billion yuan, an increase of 38% over the same period of the previous year; realized a profit of 18.78 billion yuan, A year-on-year increase of 154%, both achieved substantial growth.

In the first three quarters of 2021, Chalco's operating income was approximately 194.929 billion yuan, an increase of 46.39% year-on-year; its net profit was approximately 5.3 billion yuan, an increase of 1036% year-on-year.

  Duan Shaofu, director of the Heavy Metals Department of the China Nonferrous Metals Industry Association, believes that the fundamental reason why non-ferrous metal companies have reached a record high profit is the economic recovery, the imbalance of supply and demand, the impact of capital liquidity, and the development of new energy vehicles and other related industries.

The market's good expectations for the recovery of the global economy have promoted the recovery of the consumer market.

From the perspective of supply and demand, the output of copper mines and other minerals has recovered slowly and cannot keep up with the increase in demand.

From the perspective of currency liquidity, the United States has initiated quantitative easing monetary policy, which has pushed up the price of non-ferrous metals to a certain extent.

  In the first three quarters of 2021, the production and sales volume of China's new energy vehicles reached 2.166 million and 2.157 million, respectively, an increase of 185% year-on-year, which correspondingly drove the demand for non-ferrous metals in related fields, especially the demand for lithium battery materials.

In the first three quarters of 2021, domestic lithium carbonate equivalent production reached 270,000 tons, a year-on-year increase of 49.7%, and consumption reached 258,000 tons, a year-on-year increase of 95%. Both the production and consumption of lithium battery materials showed double-digit growth, of which lithium iron phosphate Output increased by 200% year-on-year.

  Although the increase in the prices of bulk raw materials can greatly increase the profitability of the industry, it will inevitably affect downstream consumption.

"As an important production area in the manufacturing industry, the non-ferrous metal industry resolutely implements the policy of the Party Central Committee and the State Council to ensure supply and price stability, overcome difficulties such as insufficient power supply, poor international logistics, and rising energy prices, and do everything possible to increase production to ensure market supply. Played an important role in this regard.” said Zhao Wuzhuang, the former deputy director of the Policy Research Office of China Nonferrous Metals Industry Association.

  Data show that in the first 10 months of 2021, my country's refined copper output was 8.616 million tons, a year-on-year increase of 5.85%, refined lead output was 5.956 million tons, a year-on-year increase of 13.33%, and refined zinc output was 5.432 million tons, a year-on-year increase of 3.19%.

  Innovation accelerates the transition to green

  Cyclical fluctuations in the prices of bulk raw materials are the norm in the market, and it is impossible for the non-ferrous metal industry to achieve efficiency gains by rising prices.

Only by doing a good job in the industry's own "strengthening" and conducting counter-cyclical and cross-cyclical adjustments with a strategic vision, can we continue to open up new space on the road of high-quality development.

  Mo Xinda, deputy director of the Light Metal Department of the China Nonferrous Metals Industry Association, said that in the development of the non-ferrous metal industry, many sub-sectors have actively promoted the green and low-carbon transformation of the industry through continuous innovation.

  In the electrolytic aluminum industry that has attracted much attention, under the background of increasingly stringent environmental protection standards and increasing requirements for automation and intelligence, China's comprehensive AC power consumption per ton of aluminum ingots has been reduced by 24 kWh, leading the world in indicators, and energy efficiency has been further improved .

In 2021, the electrolytic aluminum industry will further optimize its energy structure through capacity replacement, and clean energy consumption such as hydropower, wind power, and solar power will account for more than 23% of the consumption, an increase of nearly 5 percentage points from the end of 2020.

  The recycling of non-ferrous metals is one of the innovative paths for the green transformation of the non-ferrous industry.

In 2021, the growth rate of secondary aluminum production will accelerate, and the annual output is expected to exceed 8 million tons. At the same time, the integrated development of electrolytic aluminum, secondary aluminum, and aluminum processing industries will also begin to accelerate.

The electricity consumption of secondary aluminum production is only about 5% of that of electrolytic aluminum. Accepting electrolytic aluminum consumption through secondary aluminum will become a way to save energy and reduce carbon.

  On the one hand, the industry is accelerating innovation, and on the other hand, the continuous policies that have been introduced have given impetus to industrial innovation.

In August 2021, the National Development and Reform Commission issued the "Notice on Improving the Tiered Electricity Price Policy for the Electrolytic Aluminum Industry" to promote the electrolytic aluminum industry to continuously improve energy efficiency, reduce carbon emission intensity, and serve the economic and social development of a green and low-carbon cycle.

  Vigorously develop non-ferrous metal functional materials that support strategic emerging industries such as new generation information technology, high-end equipment, bioengineering, energy saving and environmental protection, and new energy vehicles, which is an important way for the industry to move toward the high-end of modern manufacturing.

  "At present, my country has become a major producer of lithium-ion power battery materials in the world. The output of cathode materials accounts for more than 70% of the world, but this must not be taken lightly." Zhao Wuzhuang said that the speed of technological progress in the field of new materials is accelerating, and the technology of a generation of products The life span is constantly shortening. Only by continuously increasing R&D investment can the mechanism of "one generation of production, one generation of research and development, one generation of pre-research and one generation of reserve" be formed, and in order to remain invincible in the fierce international competition.

  Continue to expand overseas markets

  Regarding the focus of the future development of the non-ferrous metal industry, Ge Honglin believes that it can continue to make efforts to expand overseas markets.

  In terms of smooth domestic and international dual cycles, the non-ferrous metal industry has actively explored in 2021.

In order to break through resource constraints, the non-ferrous metal industry has formed large-scale mineral assets overseas, and overseas asset management has become an important source of profits for many companies.

In 2021, six major metal mines will be newly built and put into production in the world. Except for three iron mines, the other three copper mines are all invested and constructed by my country's Zijin Mining Group.

Among them, the two overseas are Kamoa-Kakula, which has a production capacity of 300,000 tons of copper per year in the Democratic Republic of the Congo, and Timok, which has a production capacity of 90,000 tons of copper per year in Serbia.

In 2021, the overseas copper production capacity of Chinese enterprises will exceed 2 million tons per year.

  Aluminum companies actively respond to the "One Belt One Road" initiative and have obtained nearly 10 billion tons of bauxite resources overseas, which not only guarantees the safety of the industrial chain supply chain, but also gains the right to speak internationally. In 2021, the price of bulk raw materials will generally rise in the background. Under the circumstance, the import price of bauxite is basically stable, effectively reducing the economic operation cost.

  "However, the future needs to continue to expand overseas markets." Mo Xinda analysis believes that at present, overseas bauxite development and import countries are relatively concentrated, with Guinea, Australia, and Indonesia accounting for more than 99%, and further diversification is needed in the future. Development to ensure supply security.

  Zhao Wuzhuang believes that, focusing on domestic shortage of resources, through international cooperation to realize the use of overseas resources is an important measure for my country's non-ferrous metals industry to give play to its technological advantages and expand development space.

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