China releases 5-year nonferrous metals plan
Shanghai. January 31. INTERFAX-CHINA - China intends to improve the structure of its nonferrous metals industry, promote overseas investment and control output volumes under the 12th Five-Year Plan (2011-2015) for the sector released by the Ministry of Industry and Information Technology (MIIT) Jan. 31.
China will continue to encourage aluminum and magnesium smelters based in areas that suffer from energy shortages to move to western areas with abundant energy supplies and resources. At the end of 2010, western China accounted for about 51 percent of national aluminum output and 50 percent of magnesium output, up by five percentage points and three percentage points from 2005, respectively.
Although the National Development and Reform Commission (NDRC) called a moratorium on all new aluminum projects in April 2010 in a bid to reduce overcapacity, projects in western areas such as the Xinjiang Uyghur Autonomous Region have continued to get the go-ahead, Interfax previously reported.
The domestic aluminum industry is blighted by serious overcapacity and had a utilization rate of only 70 percent in 2010. A utilization rate of around 90 percent is healthy, while a figure below 85 percent indicates problems, Luzheng Futures analyst Zhang Xi told Interfax.
The five-year plan also aims to increase the concentration of copper and nickel smelting bases in coastal areas. China is highly reliant on imports of the two metals and such a move will help reduce freight costs, said Ye Xin, an analyst with Essence Securities. Imports account for more than 80 percent of China's copper concentrate consumption.
Copper smelting capacity is currently concentrated in the landlocked provinces of Jiangxi and Anhui in central China and Yunnan Province in the southwest. Anhui-based Tongling Nonferrous Metals Group enjoys lower production costs than fellow state-owned smelters Jiangxi Copper and Yunnan Copper due mainly to its proximity to the coast and the national financial and shipping center of Shanghai, Ye added.
China will also encourage investment in overseas production of alumina, aluminum, copper, lead, zinc and nickel in the next five years. While many domestic companies are eyeing merger and acquisition (MA) opportunities abroad, few have yet begun building factories outside China, Ye said.
Investing in overseas production can help conserve China's resources and environment, noted Luzheng's Zhang.
MIIT aims for annual output of 10 nonferrous metals to total 46 million tons by 2015, up by about 47 percent on 2010 levels, including 6.5 million tons refined copper, 24 million tons aluminum, 5.5 million tons lead and 7.2 million tons zinc. Meanwhile, the top 10 smelters will account for 90 percent of copper and aluminum output, as well as 60 percent of lead and zinc output.
Table 1: Output and consumption of 10 nonferrous metals, 2001 - 2010
| Product | Output ('000 ton) | Apparent consumption ('000 ton) | ||||||
| 2005 | 2010 | Growth (%) | 2005 | 2010 | Growth (%) | |||
| 2001-2005 | 2006-2010 | 2001-2005 | 2006-2010 | |||||
| Total | 16,390 | 31,210 | 15.9 | 13.7 | 16,700 | 34,300 | 16.2 | 15.5 |
| Refined copper | 2,600 | 4,580 | 13.7 | 12.0 | 3,740 | 7,530 | 14.0 | 15.0 |
| Aluminum | 7,800 | 15,770 | 21.1 | 15.1 | 7,120 | 15,920 | 14.0 | 17.5 |
| Lead | 2,390 | 4,260 | 16.6 | 12.2 | 1,980 | 4,240 | 25.0 | 16.5 |
| Zinc | 2,780 | 5,160 | 7.1 | 13.7 | 3,250 | 5,600 | 16.9 | 11.5 |
| Nickel | 95 | 171 | 13.2 | 12.5 | 197 | 520 | 27.9 | 21.4 |
| Tin | 122 | 164 | 1.9 | 6.1 | 102 | 124 | 15.3 | 4.0 |
| Antimony | 138 | 187 | 4.1 | 6.3 | 74.5 | 71 | 14.4 | -0.1 |
| Mercury | 1.1 | 1.6 | 40.0 | 7.8 | 1.1 | 1.6 | 2.4 | 7.8 |
| Magnesium | 451 | 654 | 17.4 | 7.7 | 107 | 230 | 33.2 | 16.5 |
| Titanium | 9.2 | 74 | 37.1 | 51.7 | 11 | 71 | 26.5 | 45.2 |
Source: MIIT
- KHM