SHANGHAI, Jun. 4 (SMM) – The China Nonferrous Metals Industry Association (CNIA) Secondary Metal Branch released the 2012 China Secondary Nonferrous Metals Industry Development Report on May 28. The report points out output of major secondary nonferrous metals products grew rapidly in 2012, with industry structure further improving. But nonferrous metals prices continued to fall and enterprise profitability decreased, while scrap nonferrous metals imports declines. Demand for nonferrous metals should remain strong in the near future, but secondary metals industry confronts both opportunities and challenges.
Proportion of Secondary Resources in Primary Metals Exceed 1/3
China produced 4.80 million mt of secondary aluminum in 2012, and produced 2.75 million mt of secondary copper and 1.40 million mt of secondary lead. 1.44 million mt of secondary zinc output was affected by the sluggish primary zinc prices. Total output of the four categories was up 3.7% YoY, to 10.39 million mt, with the proportion of secondary nonferrous metals output nearly one third in primary nonferrous metals output. Due to sluggish prices, imports of major raw materials slowed in 2012. Copper-related scrap imports were 4.86 million mt, up 3.6% YoY; scrap aluminum imports were 2.59 million mt, down 3.5% YoY.
Domestic secondary nonferrous metals industry technology advanced rapidly in 2012, with great strides in energy savings and emission reduction implementation. 3.50 million mt/yr of secondary copper, secondary aluminum, secondary lead and secondary zinc outdated capacity was eliminated. Energy consumption indicator at major producers decreased further, with coal consumption in secondary aluminum production falling to 110 kg/mt, and coal consumption in secondary copper production falling to 250 kg/mt, and coal consumption in secondary lead production falling to 100 kg/mt, down 30%, 49% and 38%, respectively, from 2008. As the industry entry requirements and environmental protection policy took effect, secondary nonferrous metals enterprises pushed forward reform.
Prosperous Industry Development Outlook
The secondary metals industry has played a large part in domestic recycling economic construction, and contributed a lot to economic development.
"The following ten years are a crucial period for the construction of a well-off society, and per capita nonferrous metals consumption will double from current levels, with the secondary utilization industry expected to grow most rapidly in China." said Shang Fushan, Deputy Chairman of the CNIA.
The report anticipates that domestic secondary copper output will exceed 5 million mt by 2020; secondary aluminum consumption will outstrip 6.80 million mt by 2015, and exceed 8.00 million mt by 2020.
Severe Challenges Confront Secondary Metals Industry
China's secondary metals industry faces many challenges. Enterprises confront with weakening demand overseas, domestic overcapacity and rising costs of labor, resources and environment.
China will remain in strong demand for major energy and mineral raw materials in the following 10-20 years. But availability of especially scrap copper imports will be low due to decreasing production overseas.
But domestic scrap recycling is increasing. 6.60 million mt of the major four scrap categories was recycled in 2012, up 5.09% YoY, with 1.30 million mt of scrap copper, 2.70 million mt of scrap aluminum, 1.40 million mt of scrap lead and 1.50 million mt of scrap zinc, up 8.33%, 22.7%, 3.7% and -13.3%, respectively, on a YoY basis. Major raw materials imports slowed. Scrap aluminum imports in Q1 were 570,000 mt, down 0.6% YoY; scrap copper imports were 1.03 million mt, down 3% YoY.
Scrap copper imports should remain between 300,000-500,000 mt/month despite China's demand will continue to grow, while scrap aluminum imports will be between 200,000-400,000 mt/month.
Besides, the secondary nonferrous metals industry needs to further raise consolidation rate. (Edited by SMM)