"In the first quarter of this year, the non-ferrous metal industry adhered to the principle of stability, sought progress while maintaining stability, accelerated the construction of a new development pattern, and the overall operation of the industry was stable. Production is off to a good start, investment remains on the rise, exports are beginning to show signs of concern, and profits are obviously declining." Recently held in the first quarter of 2023 nonferrous metal industry operation press conference, China Nonferrous Metal Industry Association Vice president Chen Xuesen said.
In the first quarter, the production of non-ferrous metals got off to a good start. The industrial added value of non-ferrous metal enterprises registered an increase of 5.8% over the same period of last year, 0.6 percentage points higher than the growth rate of the whole year, and about 2.8 percentage points higher than that of the national industrial added value of enterprises registered in the first quarter. In the same period, the investment in fixed assets completed by the non-ferrous metal industry increased by 11.9 percent, 1.2 percentage points higher than the same period of last year.
Guo Zhaohui, chief commodity research analyst at China International Capital Corporation's research department, believes the "high growth in both non-ferrous metal production and fixed investment" is driven by two factors. First, after the adjustment of the epidemic prevention and control policy, domestic terminal demand picked up, which stimulated upstream production. From the point of view of the corresponding primary processing products, aluminum cables, construction aluminum profiles and copper rod wire, copper rod operating rate has increased compared with the same period last year. Second, the support of monetary policy and industrial policy has improved enterprises' investment intention and industrial confidence. Prudent monetary policy is beneficial to the nonferrous metal industry. In terms of industrial policies, the Ministry of Natural Resources has issued a series of resource guarantee policies to support industrial development, optimized the examination and approval of land use, sea use and ore use, constantly improved the ability to guarantee natural resource elements, actively promoted a new round of breakthrough strategic action for prospecting, and boosted the development confidence of upstream mining enterprises of non-ferrous metals.
In the first quarter, non-ferrous metal imports increased, while exports declined. The total volume of import and export trade of non-ferrous metals was US $85.94 billion, up by 10.4% year on year (on a comparable basis). Of this total, imports amounted to US $69.93 billion, up by 13.2%; Exports were $16.01 billion, down 0.03%.
Guo said that the country's non-ferrous metal imports mainly focus on mineral raw materials, such as copper concentrate, bauxite and zinc concentrate, while its exports mainly focus on primary processed products, such as aluminum. The year-on-year growth of imports was mainly due to the fact that the shipping logistics was still affected by the epidemic in the same period last year, and the demand for raw materials and downstream demand for non-ferrous metal smelting production also rose year-on-year. The fall in exports came as overseas economic recovery weakened in the first quarter compared with a year earlier and manufacturing purchasing managers' indices in the US and eurozone came under pressure. Taking electrolytic aluminum as a typical example, aluminum exports account for more than 10% of domestic aluminum output, and weak export demand may weigh on demand.
Aluminum export has an important supporting effect on the development of aluminum processing industry. Zhang Jilin, Vice chairman of China Nonferrous Metal Processing Industry Association, suggested that, first, we should actively deal with economic and trade frictions, give full play to the role of the four-way linkage mechanism, and maintain the existing market; Second, we should strengthen the research of foreign aluminum application market, understand and tap the potential demand of foreign customers, and actively open up new alternative markets; Third, we should change the export of aluminum products into the export of aluminum products to achieve a high level of aluminum exports.
In the first quarter, non-ferrous metal enterprises on the regulation revenue growth, profit decline. The operating income of non-ferrous metal industrial enterprises reached 1,824.54 billion yuan, an increase of 0.2 percent over the same period last year. The total profit was 54.20 billion yuan, down 45.3 percent from the same period last year.
Guo Zhaohui believes that the profit decline of enterprises concentrated in smelting and rolling links, mainly due to the decline in the net profit rate of sales, because some metal prices compared to the same period last year. The continuous low profit and production instability may dampen the investment enthusiasm of smelting enterprises and have adverse effects on the technological progress and investment of the industry in the long run.
"From the market point of view, the decline in industry profits is also the embodiment of a reasonable return of product value." Peng Bo, director of Statistics Department of China Nonferrous Metal Industry Association, believes that with the recovery of various consumer markets this year, it is expected that the nonferrous metal industry will gradually get out of the situation of continuous decline in profits, and the overall operation will return to normal.
How to deal with the challenges of "incipitous export worries and obvious decline in enterprise benefits"? Mr Chen said the industry's difficulties were temporary. The Non-ferrous Metal Industry Association will listen to the appeals of enterprises through research, and timely report the appeals of enterprises to relevant departments and make suggestions on the problems faced by some enterprises such as declining export orders, overstocking of products and poor capital turnover.
Zhao Wuzhuang, former deputy director of the policy research office of China Non-ferrous Metal Industry Association, believes that with the gradual recovery of downstream consumption in the second quarter or the second half of the year, the supply and demand of international commodities will recover to stabilize, the decline in exports will be eased, and China's non-ferrous metal industry will return to the track of healthy development.
Chen Xuesen predicted that the second quarter of non-ferrous metal industrial production, investment still maintain a relatively fast growth momentum, the main non-ferrous metal prices, the regulation of non-ferrous metal enterprises profit decline will narrow. In the first half of this year, the growth rate of industrial added value of non-ferrous metals is expected to remain above 5%, and the output of ten commonly used non-ferrous metals according to the new comparable caliber will increase by about 6% year-on-year. In the first half of this year, the growth rate of fixed asset investment in the non-ferrous metal industry is expected to maintain at around 10%.
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