Metals News
China Copper Industry in Crucial Stage of Transformation and Upgrading
smm insight
Jun 20,2013

SHANGHAI, Jun. 20 (SMM) –
Industry Structure Expected to Improve
The China Nonferrous Metals Industry Association (CNIA) believes domestic copper industry structure will improve due to three reasons.

First, fixed-assets investments at mines and processors increased, while investments in the smelting industry slid. That implies the industry structure is being adjusted.

Second, mine raw materials supply growth is faster than smelting output, with self-sufficiency rate rising. Soaring copper prices prompted investments in the mining industry, and some low-grade ore was well utilized.

Third, the industry consolidation rate continued to rise. Refined copper output at the top 5 copper producing provinces reached 3.84 million mt in 2012, which accounted for 66% of the national total, up 1.2 percentage points from 2011. Total copper output at the top 5 copper smelters accounted for 58% of the national total, flat at 2011 levels.

Copper Industry Sustainable Development Faces Severe Situations
Domestic copper prices fluctuated at low levels in Q1 this year, with difficulties confronted with enterprises. Experts believe the copper industry will face severe situations in future.

Demand for copper will weaken as technology advanced and substitutes are developed, and market participants should not be too optimistic towards the boost from urbanization and strategic emerging industry development.

Besides, RMB appreciation and ample international copper supply will refrain China's exports, cutting domestic copper apparent consumption.

Development Mode Change to Affect Copper Consumption
Domestic copper consumption has been high over the past years. Experts believe the change in domestic development method will push down copper consumption and help ease copper shortfalls. In this context, China should put emphasis on potential effects from the change of development mode on copper consumption.
Copper Industry Development Relies on Resource Security Ability and Technology Innovation
China's copper industry is still weak in resource control ability and relies heavily on overseas resources, with technology innovation ability and hi-tech materials research and development less advanced than advanced countries. Experts advised China should enhance resource security ability, construct technology-oriented industry, increasing international competitiveness and pushing industry reform and upgrading.


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