Since the outbreak of the new crown pneumonia epidemic, global commodity prices have fluctuated sharply, which has brought considerable challenges to the production, operation and risk management of physical enterprises. In order to further strengthen industry exchanges, give full play to the role of futures tools in controlling risks, and effectively serve the development of the real economy, the Shanghai Futures Exchange recently launched a series of online metal week activities on the “Industry Training Base” through online live broadcast, the first phase of the event It was launched from April 7th to April 13th. From now on, this newspaper will carry out a series of reports on the event, so stay tuned.
Since the beginning of this year, the non-ferrous metals market, led by copper, has fluctuated violently under the influence of the new crown pneumonia epidemic. The impact of the epidemic has led to a bleak global economic outlook and brought crises and challenges to the development of the copper industry. In this context, the first phase of the 2020 “Industrial Training Base” online metal week event held on April 7th in the previous period invited Xu Changning, the futures business director of the Ministry of Commerce of Tongling Nonferrous Metals Group, to discuss the current status and development trend of the china copper industry. A detailed analysis.
“Copper, as an important representative of non-ferrous metal varieties, is closely related to the overall social and economic development process, especially the synchronization of the consumer side with the domestic economic development trend.” Xu Changning said that since the reform and opening up, my country’s copper industry has gone through three stages. From the early to mid-1990s, the main domestic consumption was reflected in daily necessities such as “food and clothing”. During this period, the growth of copper consumption was not particularly fast; from the mid-to-late 1990s, as the socio-economic level improved , Began to solve the problem of people’s “housing and transportation” demand. Consumption growth began to concentrate on the consumption of durable goods such as automobiles and home appliances, and real estate. The beryllium copper consumption closely related to it officially entered a stage of rapid development; after the 2008 financial crisis, copper The consumption growth rate began to decline significantly, and was significantly lower than the domestic GDP growth rate. So far, the rapid growth phase of copper consumption has basically come to an end.
According to data obtained by a reporter from the Futures Daily, my country’s copper consumption increased by 2% year-on-year in 2019, and the growth rate dropped by 0.5% year-on-year. Apparent consumption was about 13 million tons. However, from the current point of view, Xu Changning believes that the growth rate of domestic copper consumption continues to slow but is not yet saturated, and it still leads the global copper consumption.
Speaking of the development status of the domestic copper industry, Xu Changning said that one can look at the upstream and downstream conditions of the industry in turn.
In terms of copper mines, due to the limitations of my country’s copper resource conditions, the development of copper mines has been severely restricted, and it is difficult to see a large leap-forward growth, which is not synchronized with the growth of domestic copper consumption. Data show that the copper content of copper concentrate in 2019 was 1.63 million tons, an increase of 4.1% year-on-year.
In terms of copper smelting, the efficiency of the copper smelting industry has been relatively good in the past few years, but in 2019 there has been a simultaneous decline in copper prices and imported raw material processing fees. He believes that, on the one hand, the global economic downturn has led to the decline in copper prices. On the other hand, in the process of the deterioration of copper supply and demand, due to the rapid development of domestic smelting industry capacity compared with output and compared with the supply of global mining raw materials, As a result, processing fees also fell simultaneously. Under such circumstances, some enterprises are in trouble, and the bottleneck of the smelting industry is beginning to appear. Affected by the epidemic, sulfuric acid as a by-product has also restricted copper smelting. The continuous increase in pressure on sulfuric acid storage has caused some smelting enterprises to experience operating difficulties and reduce production.
In terms of copper processing, overall, low-value-added industries have serious overcapacity, and high-value-added industries have great room for development.
From the perspective of terminal consumption, he said that the current largest field of copper consumption is still the wire and cable industry, but the technical content of this industry, including added value, is relatively low; followed by the household appliances industry, such as air conditioners, refrigerators, freezers, etc. It is also a pillar consumer industry of copper; finally, emerging industries, especially in new energy electric vehicles, have seen relatively rapid growth in copper consumption in recent years, but the current domestic technological development is relatively backward. Generally speaking, he said that the transformation and upgrading of domestic copper consumption has been relatively slow. This is reflected in the lower-than-expected investment in the power industry, and the consumption growth of household air conditioners, freezers, and refrigerators has declined year-on-year, which has also led to the current slow growth of copper consumption in China.
Regarding the future development trend of the copper industry, he believes that copper consumption still depends on the development trend of China’s economy. With the continuous deepening of economic development and transformation, my country’s copper consumption will gradually reach its peak, and then gradually decline to a certain position, and finally basically keep pace with GDP growth. At the same time, since the development of China’s copper industry is closely connected with the world, the main development direction is to increase the added value of copper products, such as the overall development of existing products in a purer, thinner and thinner direction. The further direction is to continue to make a fuss about the excellent properties of copper in electrical conductivity, heat conduction, sterilization and virus suppression. In addition, ternary or above alloys will be the eternal research direction.
From the perspective of the transformation and development of the upstream and downstream of the copper industry chain, as the domestic upstream mines are restricted by natural endowments, the development of my country’s mines will focus on entering foreign markets. In terms of copper smelting, domestic production capacity may have been saturated, but output is still increasing year by year. Technology upgrades and increasing capacity utilization are the top priorities. Mergers and reorganizations and the exit of some inefficient production capacity will be inevitable; in terms of copper machining, low value-added industries in the future Production capacity will gradually decrease, and high value-added industries will have great potential. Among them, the rapid growth of copper consumption related to the electric vehicle industry is sustainable; in terms of exports, it will gradually shift to the coexistence of product exports and capital exports, including the transfer of mining and smelting processing capacity.