2015 Year 12 The monthly index of business sentiment for the nonferrous metals industry, as compiled by the China National Institute for Economic Forecasting, is: 11 3, Slightly rebounded from the previous month, but remains at... “ Supercooling ” The weak situation in regional operations and industry development will be difficult to reverse in the short term.

Currently, the global nonferrous metals market has entered a phase of profound adjustment, and China’s nonferrous metals industry is facing severe challenges. 2015 Year 12 The monthly index of business sentiment for the nonferrous metals industry, as compiled by the China National Institute for Economic Forecasting, is: 11.3, Slightly rebounded from the previous month, but remains at... “ Supercooling ” The weak situation in regional operations and industry development will be difficult to reverse in the short term.

　　 Analysis of the Current Development Situation of the Industry

　　Due to the continuous accumulation of risks from various fronts, the current industry is facing increased risks and challenges. In particular, the strengthening of the U.S. dollar and the growing downward pressure on China’s domestic economy have led to a prolonged period of sluggish prices for nonferrous metals in both domestic and international markets—this trend is unlikely to reverse anytime soon. 2008 rebounded relatively quickly that year. Therefore, 2016 The industry's annual performance may be more challenging.

　　First, the situation of oversupply in non-ferrous metals will likely persist. Non-ferrous metals such as copper and aluminum are major commodities in international trade and enjoy a high degree of internationalization. When analyzing market supply and demand, it’s crucial not only to look at the domestic market but also at the international market. Over the past period, rising prices have triggered a concentrated wave of construction for large-scale non-ferrous metal mines and primary aluminum smelters. To date, newly commissioned capacities for copper, zinc, nickel mines, as well as primary aluminum capacity, continue to come online, further exacerbating the oversupply situation in the market. 2016 In the coming year, assuming that China’s production reduction measures are effectively implemented, global primary aluminum production is still expected to reach... 5600 Over 10,000 tons, and with 2015 The situation of oversupply will remain unchanged, with annual levels staying roughly stable. 2016 Global copper production capacity from mines will continue to increase this year, exceeding... 1750 Ten thousand tons, compared to 2015 Year-on-year growth 3.6% Moreover, with no signs yet of large-scale production cuts, the situation of oversupply is bound to persist. At Glencore’s mines, zinc production has been reduced. 50 Under the implementation of the ten-thousand-ton measures, it is expected that... 2016 Global zinc supply from mines will decrease this year. 80 Ten thousand tons, but still need to digest. 2012 Year to 2014 Annual global zinc concentrate metal surplus 100 Ten thousand tons. From the perspective of supply and demand, the non-ferrous metal markets both domestically and internationally are not optimistic.

　　Second, the negative effects of financial leverage are becoming apparent. Primary nonferrous metals possess characteristics of derivative financial instruments; during periods of market activity, their financial status rises, making them an important tool for financing. Financial leverage has become a key driver behind price increases and has also played a significant role in enhancing corporate economic performance. However, as the market begins to weaken, the financial standing of nonferrous metals has noticeably declined. Financial institutions have increasingly been withdrawing loans from enterprises, and financial leverage has turned into a lubricant that accelerates price declines. Under the influence of deleveraging, many nonferrous metal producers are facing ever-tighter cash flows, highlighting their growing operational risks.

　　Third, the issue of integrating domestic and international markets urgently needs to be addressed. As competition in the global nonferrous metals market intensifies, trade frictions are inevitable. 2016 This year, the situation facing China’s exports of non-ferrous metal products will become even more challenging. In particular, exports of aluminum processing products may decline, which will severely impact the growth of domestic aluminum consumption.

　 　To 2016 Forecast of the annual industry performance

　　Based on the current trends in industrial development, 2016 The industry faces numerous difficulties in its annual operations.

　　First, the pace of production growth has slowed down. To address the situation of oversupply, China’s non-ferrous metals industry must take proactive measures, strengthen self-discipline within the industry, and implement voluntary production cuts. It is expected that... 2016 This year, the growth rate of China's output of ten non-ferrous metals will show a noticeable slowdown, possibly reaching... 6% Approximately, about 5400 Ten thousand tons. Among them, the output of electrolytic aluminum is... 3300 Around 10,000 tons, up year-on-year. 3%。

　　Second, investment continues to adjust. It is expected that... 2016 This year, investment in China's non-ferrous metal smelting projects will continue to decline, and the growth rate of investment in mining and advanced processing projects will also slow down more noticeably. As a result, fixed-asset investment for the entire year may experience negative growth.

　　Third, the decline in trade is unlikely to improve. 2016 This year, China's non-ferrous metals import and export trade is likely to continue its downward trend, though the pace of decline will slow. It is expected to decrease year-on-year. 10% Left and right. Among them, imports are expected to decline year-on-year. 10% Left and right; export value is expected to decline year-on-year. 5% Left and right.

　　Fourth, price trends are weak. It is expected that... 2016 In both domestic and international markets, prices of major non-ferrous metals continue to hover at the bottom. Among these, the annual average prices of copper, aluminum, zinc, and nickel in the domestic market were, respectively, lower than... 2015 Year-on-year decline 7%、6%、6% and 3% , approximately 3.8 Ten thousand yuan / ton, 1.15 Ten thousand yuan / ton, 1.45 Ten thousand yuan / ton and 8 Ten thousand yuan / Ton.

　　Fifth, corporate profitability is declining. Affected by market prices, it is expected that... 2016 In China, profits of large-scale nonferrous metal enterprises remained sluggish, declining year-on-year. 10% Left and right. Among them, profits of mining enterprises have declined. 30% Left and right.

　　Based on the current situation, 2016 In recent years, the macroeconomic environment for the development of China’s nonferrous metals industry has been less than optimistic. However, it is important to recognize that the role of nonferrous metals as supporting materials for strategic emerging industries remains unchanged. With advances in science and technology, lightweight metallic structural materials are increasingly replacing traditional materials such as steel, cement, and wood. In the last century... 80 In recent years, China has pointed out that global non-ferrous metal consumption accounts for the same proportion as steel consumption. 5% the concept, and currently, the proportion of non-ferrous metal consumption to steel consumption has significantly increased in developed countries. 2014 In the year, U.S. consumption of nonferrous metals was approximately 840 Ten thousand tons, with steel consumption around... 9890 Ten thousand tons, accounting for 8.5% ; Japan's share is 6.7% ; Germany’s share is as high as 11% In comparison, back then, the proportion of non-ferrous metal consumption in China to steel consumption was... 6.2% However, it remains significantly lower than the levels seen in developed countries. This indicates that China’s demand for nonferrous metals has not yet reached its peak, and there is still room for expanding applications.

　　Several Recommendations for Promoting the Healthy Development of Industries

　　High- and mid-end products in the nonferrous metals sector hold promising market prospects, and there is still room for policy adjustments. Therefore, as long as we persistently pursue structural reforms on the supply side, I believe the challenges facing China’s nonferrous metals industry can be overcome.

　　2016 In recent years, the structural adjustment of China's nonferrous metals industry has primarily revolved around... “ Prohibit, withdraw, reduce, merge, transfer, and upgrade ” Make an effort in several aspects.

　　First, we must firmly implement the State Council’s policy on addressing overcapacity by prohibiting the reckless expansion of domestic nonferrous metal smelting and general processing capacity. Due to various factors, some newly built nonferrous metal smelting and general processing facilities are still under construction and gradually coming online. Therefore, it is essential to control the addition of new capacity at the source. “ Prohibition ” We will focus on addressing issues at the policy level, firmly implementing relevant national policies, and intensifying supervision and inspection to investigate and punish typical cases of illegal new projects. We will continue to adhere to policies such as equivalent or reduced replacement for newly built electrolytic aluminum projects, thereby effectively preventing any unauthorized expansion of electrolytic aluminum production capacity. At the same time, drawing on the approaches used to address excess electrolytic aluminum capacity, we will step up efforts to tackle overcapacity in copper-nickel smelting, lead-zinc smelting, and the smelting of rare metals such as tungsten and molybdenum.

　　Second, we need to accelerate the exit of production capacity that lacks competitiveness from the market. Currently, many state-owned enterprises in the nonferrous metals industry are operating at a loss. Under these groups, there are generally enterprises that have been losing money for a long time, with no prospect of turning around and facing significant difficulties in exiting the market. For these enterprises, we must follow... “ One enterprise, one strategy. ” the principle of adopting comprehensive measures and handling enterprises through market-oriented mergers and reorganizations as well as lawful bankruptcy procedures. The focus is on two key aspects: first, increasing fiscal investment from both the central and local governments and improving the social safety-net policy system to address... “ Zombie enterprise ” Personnel placement issues. Second, support commercial banks in... “ Zombie enterprise ” Accelerate the disposal of non-performing loans and bad debts, and promote... “ Zombie enterprise ” Exit smoothly and as soon as possible. In short, we need to promptly refine the exit mechanism to facilitate... “ Zombie enterprise ” Accelerate withdrawal from the market.

　　Third, we must strengthen industry self-discipline and jointly implement production restrictions and output reductions. When market prices fall below the industry’s average production cost, leading to widespread losses, enterprises’ enhanced self-discipline and voluntary adoption of joint production restrictions and output reductions are not only an inevitable choice for safeguarding their own interests, but also a proactive step toward restoring the fundamental balance between supply and demand in the market and countering the malicious short-selling activities of speculative capital in nonferrous metal futures. Therefore, on the premise of fully respecting enterprises’ status as market entities, through industry self-regulatory measures such as market early warnings, we can encourage enterprises to make autonomous decisions based on market rules and respond flexibly to changes in supply and demand by voluntarily implementing production cuts and restrictions. Such efforts will gain understanding and support from the entire society.

　　Fourth, we must strengthen mergers and restructuring to enhance industry concentration. We should actively promote cross-regional, cross-industry, and cross-economic-type mergers and restructuring among nonferrous metal enterprises, facilitating the concentration of resource factors toward leading companies and boosting industry concentration. This will help create an industrial and corporate organizational structure that neither gives rise to monopolies nor lacks market influence—while ensuring orderly competition without resorting to vicious rivalry. This is particularly important in the context of handling... “ Zombie enterprise ” In the process, we must adhere to the principle of capacity replacement, promote more mergers and reorganizations, and minimize closures and bankruptcies, thereby achieving an effective conversion of resources and assets.

　　Fifth, we should actively promote international industrial cooperation and facilitate the cross-border transfer of industries. The global economy is currently entering a new round of profound adjustment, with commodity prices at a low point and the nonferrous metals market also entering the downward phase of this economic cycle. Seizing this opportunity, we should leverage China’s technological, capital, and managerial advantages in nonferrous metal smelting and processing to accelerate international capacity cooperation, achieve cross-border transfers, comprehensively enhance enterprises’ capabilities for international operations, and open up new growth prospects for the industry.

　　Sixth, we must strengthen technological upgrading and promote industrial restructuring. Currently, China’s nonferrous metals industry as a whole occupies the mid-to-lower end of the national industrial value chain. Relying on technological innovation, accelerating technological upgrades, developing deep processing, enhancing added value, and increasing effective supply are all key directions for further industrial development. This not only creates immediate, effective investment but also helps establish a long-term growth engine. We should innovate the ways in which the state finances support enterprises’ technological upgrades, encouraging companies to speed up their pace of technological transformation and increase support for the development of high-end products such as aluminum alloys for aerospace applications, titanium alloys for marine use, zirconium alloys for nuclear power, functional materials for next-generation information technology, and cutting tools for CNC machine tools—thereby enabling the industry to make a leapfrog transition toward the mid- to high-end sectors.