[SMM investigation] present situation and Prospect of Guangxi Copper Industry chain in 2020

June 20 SMM News: in order to better serve the customers of Guangxi copper industry chain, our SMM Foshan Office and colleagues from Shanghai headquarters conducted an in-depth visit and research on the key copper industry chain customers in Guangxi from June 15 to 19. We have a general understanding of the current situation of upstream and downstream copper enterprises in Guangxi Province, and now we will share the relevant situation with you.

Supply end

Copper mine:

There are 20 copper deposits with resource reserves in Guangxi, which are mainly distributed in Nanning, Baise and Laibin City. of the 9 copper deposits explored since 1988, 4 are associated with lead, zinc, tin, antimony and gold. By 2017, Guangxi has identified copper reserves of about 380000 tons, of which the Qinjia medium-sized deposit in the white area is 140921 tons, accounting for 37% of the total in Guangxi.

Guangxi Debao Copper Mine, founded in June 1966, is one of the first mining and metallurgical enterprises in Guangxi Autonomous region, mainly engaged in mining and sales of copper, iron, tin, sulfur, bauxite, calcite powder, calcium aluminate and their by-products. So far, it has gone through 47 years of ups and downs, and the subordinate relationship has changed several times. In October 2011, the enterprise completed the corporatization transformation, and the enterprise changed its name from Guangxi Debao Copper Mine to Guangxi Debao Copper Mine Co., Ltd., which is a key state-owned enterprise supervised by Baise State-owned assets Supervision and Administration Commission, and is the largest copper production base in Guangxi. The daily mining and separation capacity is 800t, the annual output of copper concentrate is 14894 tons, and the grade of copper concentrate is 23.5%. In addition, Baise Rongda Copper Co., Ltd., a joint venture with Zhangjiagang Copper Co., Ltd., has an annual output of 20,000 tons of crude copper.

Due to the large long-term gap of copper mines in many smelters in the region, the market guarantee rate is less than 10%, and most of them are purchased from outside the region or from abroad. According to customs data, Guangxi imported 1.88 million tons of copper ore in 2019, an increase of 23 percent, with a value of 19.78 billion yuan, an increase of 18 percent. The national import volume was 21.99 million tons, an increase of 11.6 percent over the same period last year. Thus it can be seen that in 2019, Guangxi accounted for 8.55%, and the growth rate of imports exceeded that of the whole country.

Smelter:

At present, Guangxi has three copper smelters, namely Guangxi Jinchuan Nonferrous Metals Co., Ltd. (design capacity 470000 tons / year, raw material is copper concentrate), Wuzhou Jinsheng Copper Co., Ltd. (design capacity 300000 tons / year currently only 150000 tons / year, raw material is crude copper) and Guangxi Nanguo Copper Co., Ltd. (design capacity 300000 tons / year, raw material is copper concentrate). In 2019, the total operating capacity of the three smelters is 920000 tons, with a total output of about 630000 tons and a capacity utilization rate of 68.47 percent.

Guangxi Jinchuan Nonferrous Metals Co., Ltd.: the company was established on May 11, 2010 with a registered capital of 3 billion yuan. The company's main products are electrolytic cathode copper and sulfuric acid. It is a joint venture between Jinchuan Group and Trafigura, with Jinchuan Group holding 70% and Trafigura 30%. The company has a design capacity of 400000, using copper concentrate to produce electrolytic copper, rough refining matching. Construction began in 2010, ignited on October 18, 2013, formal trial production on November 30, and reached production in 2015. After capacity expansion and transformation in 2019, the current production capacity is 470000. Production process: copper concentrate steaming acid, flash smelting, flash blowing, rotary anode furnace refining, electrolytic refining, two-turn two-absorption acid production, smelting slag mineral processing and other processes.

Wuzhou Jinsheng Copper Co., Ltd.: the company was established on October 18, 2017 with a registered capital of 460 million yuan. It is a company strongly introduced by Wuzhou Municipal Party Committee and Municipal Government to invigorate Wuzhou's 300000 tons of recycled copper smelting project. The company officially took over the Wuzhou annual production capacity of 300000 tons of recycled copper smelting project on June 1, 2018. It took only 3 months to complete the equipment maintenance, process and technical transformation and production recovery work. It was successfully put into operation on September 28, 2018, and the sales income exceeded 500 million yuan in that year. Production process: NGL furnace smelting scrap copper complete process, refining rocking furnace smelting scrap copper process, top-blown converter is also the world's best equipment for the treatment of electronic waste and all kinds of low-grade copper materials containing more than 10% copper. Although the design capacity of the company is 300000 tons / year, it is only 150000 tons / year at present.

Guangxi Nanguo Copper Co., Ltd.: the company is a subsidiary of Guangxi Hechi Southern Nonferrous Group, registered and established in 2010, located in Guangxi China-ASEAN Youth Industrial Park, Fusui County, Chongzuo City, Guangxi. The registered capital is 1.5 billion yuan, the company mainly purchases copper concentrate to produce electrolytic copper, which is planned to be built in three phases, with a design capacity of 300000 tons, 300000 tons and 400000 tons respectively. The first phase of the copper smelting project with an annual output of 300000 tons was formally put into production at the end of March 2019, and the anode copper was successfully produced on April 14. Production process: using the world's advanced oxygen-rich double-side blowing smelting, permanent stainless steel cathode electrolysis process.

The problems encountered by the smelter since 2020: affected by the epidemic in March this year, the export of sulfuric acid was difficult to reduce production, and then the production is relatively normal, it is difficult to say in the long term, and it depends on the situation of the mine. There are problems with production and shipping in South American mines from April to early May, which is expected to be alleviated after August. Some refineries have already suffered from a shortage of raw materials in early June, and they are still in short supply in the third quarter as a whole. Because they do not have their own mine resources, raw materials are greatly restricted by overseas supply. The raw materials of refineries are very tight this year, and many smelters have overhauled or directly reduced production to cope with the shortage of raw materials. If there is an accident in the later stage of the raw material, I will also use maintenance to adjust the production.

Demand side

Copper processing:

Overall, there are only a handful of copper processing enterprises above the current scale in Guangxi: two copper rod enterprises (Jinchuan copper rod annual design capacity of 150000 tons, Jinxin copper annual design capacity of 100000 tons), one copper alloy enterprise (Guilin Lijia annual design capacity of 12000 tons). In 2019, the three copper processing plants have a total operating capacity of 262000 tons, with a total output of about 196000 tons and a capacity utilization rate of 74.8 per cent.

Problems encountered by copper rod enterprises from 2020 to now: affected by the epidemic, copper rod enterprises generally do not resume production until mid-late March, but more orders are at full load in May, but they began to feel order pressure since June. On the one hand, there is a decrease in orders from the cable factory from the power grid, on the other hand, the price difference of refined copper is large, and the waste copper rod has a greater impact on the electrolytic copper rod. A copper rod factory said that its daily sales fell by about 15% after June compared with the previous period. In addition, electrolytic copper rod enterprises generally hold a relatively pessimistic attitude towards the downstream orders after July.

Wires and cables:

In the past two years, Guangxi has benefited from the rapid development of the Beibu Gulf, and the cable market is also expanding. Many small and medium-sized cable factories have begun to enter the Guangxi market. It is estimated that the consumption of copper poles in Guangxi will reach about 180000 tons in 2020, that is, 15000 tons per month. Among them, large factories account for about 11000, and others account for about 4, 000 tons.

It is understood that there are 20 large-scale wire, cable and enamelled wire enterprises in Guangxi: Wuzhou Tongrun, Guilin International Cable, Overview Cable, Netlink Wire and Cable, Guangxi Guangzhou Cable, Nanning Nanchang Cable, Guangxi Shunye Cable, Guangxi Qunxing Cable, Guangxi Yanggong, Nanning Silver Sequoia, Guichao Cable, Guangxi Songfa, Guangxi Deli, Guangxi overlapping Color, Guangxi South, Nanning Nanjia, Nanning Zheng Xing, Guangxi Qiaoguang, Guangxi Zhongke Yinghua, Guangxi Wanxiang and other enterprises.

Scrap copper

Guangxi has a national recycling Wuzhou circular economy industrial park. Wuzhou Circular economy Industrial Park officially started construction in 2008 and was approved as Guangxi Class A Industrial Park in October 2008. In August 2009, it was recognized as an autonomous district-level circular economy pilot park. In October 2010, it was approved as the national renewable resources "circle management" demonstration park; in September 2011, it was approved as the national "urban mineral" demonstration base. In October 2015, it was identified as a pilot park for the integration of Guangxi industrial parks; in September 2016, it passed the acceptance of sustainable development parks in the autonomous region; in July 2017, it was awarded the title of excellent national renewable resources park in 2017; in February 2018, it was successfully included in the list of provincial development zones jointly issued by the National Development and Reform Commission, the Ministry of Natural Resources, the Ministry of Housing and Urban-Rural Development and other six ministries and commissions. "China Development Zone Audit announcement Catalog" (2018 edition); It was recognized as a national green park in October 2018.

As early as when the country had not restricted the import of scrap metal, the industrial park had unlimited scenery. For example, in 2015, enterprises in the park received import approval of about 900000 tons, and the actual import of renewable resources was about 300000 tons. However, affected by the national policy and the logistics cost of local import clearance, there are only three enterprises in the industrial park with copper approval in 2019, with a total of less than 3,000 tons, which can be said to have plummeted.

Looking forward to the future copper industry chain in Guangxi:

The mine end is subject to geographical conditions and it is expected that it will be difficult to do much in the future, so it is very good to be able to maintain the status quo.

Smelting end: there is still room for growth in the next few years, first of all, the Southern Copper Industry, which plans to start producing the second phase of the electrolytic copper project of 300000 tons per year after 2022, it is understood that it has completed the construction of the 300000 phase, and it is expected to expand production smoothly in the later stage. The second is Wuzhou Jinsheng, which currently operates only 50% of its production capacity. If the smelting benefit is good, it cannot be ruled out that it will continue to expand its annual production capacity by another 150000 tons. In addition, the environmental protection recycling project of copper resources in Xiangzhou County, Fei Nan, Guangxi (annual treatment of 300000 tons of hazardous waste and 120000 tons of solid waste containing copper) is under construction and is expected to be completed and put into production in 2021, when 100000 tons of anode copper will be added. Overall, in the next few years, the capacity of electrolytic copper smelters in Guangxi still has room to increase by 450000 tons per year.

Processing side: it is reported that the projects under construction in 2020 are: Guangxi Jinxiang Copper Co., Ltd. (located in Wuzhou Circular economy Industrial Park, the first phase of anode furnace is under construction with an annual output of 100000 tons of bright copper rods. The second phase of the shaft furnace production line has an annual production capacity of 100000 tons of bright copper rods), and it is reported that the first phase will be put into production by the end of 2020. Guangxi Xinke Copper Co., Ltd. (located in Guangxi China-ASEAN Youth Industrial Park, Fusui County, Chongzuo City, Guangxi, is building the first phase of 20,000 tons of precision electronic copper strip, and the second phase reserves an annual production capacity of 20,000 tons of precision copper strip). It is reported that the first phase will be put into production by the end of 2021. In addition, there are projects that have the intention of construction but have not started construction: Zhengwei Yulin 350000-ton copper pole project.

Scrap copper end: in May 2020, the annual output of 200000 tons of recycled copper products intensive processing and multi-metal comprehensive recovery and industrial solid waste disposal center project officially signed a contract to settle in Wuzhou Recycling Park. The project, invested by Jiangxi Jinye Science and Technology Group, is the only whole industry chain project in Wuzhou Recycling Park from scrap copper to copper deeply processed products. The total investment of the project is 2 billion yuan, the annual output value is about 20 billion yuan after reaching production, and the tax revenue is more than 500 million yuan. The project mainly produces refined and deeply processed products such as recycled copper, copper bars, copper wires and cables, as well as rare and precious metal products such as gold and silver; at the same time, the project is supporting the construction of headquarters economic building, science and technology research and development center and postdoctoral mobile station.

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