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Ministry of Industry and Information Technology: the price of raw materials and minerals will not rise sharply.
May 20,2020 15:29CST
The content below was translated by Tencent automatically for reference.

SMM5 March 20: the Information Office of the State Council held a press conference on the morning of the 20th to introduce the situation related to the overall promotion of epidemic prevention and control, industrial transformation and upgrading, and promoting the stable development of the manufacturing communications industry. When asked, investment in China's mining industry fell by a large margin from January to April, reaching 9.2%. Among them, in addition to coal investment remains relatively stable, black, non-ferrous, non-metallic investment has declined by a large margin, what is the reason? Is there a sharp rise in the price of raw materials?

In response, the Minister of Industry and Information Technology said that investment in the mining industry, whether ferrous, non-ferrous or non-metallic, was declining from January to April, down 13% from January to April compared with the same period a year earlier. The main reason, we think, is that most of the mines are located in remote areas, affected by the epidemic, it is difficult for personnel to return to work, and it is relatively slow to return to work and return to production. In addition, coupled with the slowdown in the growth rate of downstream demand, the willingness of mining enterprises to invest has also been affected to a certain extent. I remember that in late February, I specially connected to Yichang, Hubei Province, to start the production work of spring ploughing and preparation for phosphate fertilizer. They also reflected that Hubei was a province rich in phosphate rock resources, and the biggest difficulty encountered at that time was that it was difficult for personnel to return to work and it was difficult for mines to transport out of the province. This is a typical example.

As for the recent orderly progress of domestic resumption of work and production, I think the decline in mine investment will be alleviated. Take the month-to-month comparison of investment from January to April. Although investment from January to April is also declining, the rate of decline is 5.8 and 23.3 percentage points lower than that in January and February, and the trend is from negative to positive. As for whether it will lead to a substantial price increase, the Minister of Industry and Information Technology does not think it will, because the prices of raw materials and ores depend not only on the prices of their own mines, but also on international ore prices. moreover, we rely on imports for most of the mines, and the proportion of domestic mines is less than 50%. In addition, with the increase of resumption of work and production in recent months, there has also been a shortage of effective demand. Under such circumstances, there is still a situation in which production exceeds demand, and there is no room and possibility for prices to rise significantly. We should also be full of confidence in the future. In accordance with the requirements of epidemic prevention and economic and social development, as long as domestic demand is really activated, it is believed that it will return to the normal level before the epidemic.

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