Huayou Resources Co., Ltd., a new bid unit for SMM Yangshan Copper Premium

SMM10 March 21: today's, Huayou Resources Pte. Ltd. (Huayou Resources Co., Ltd.) has officially become the SMM foreign mountain copper premium bidding unit. The following is the introduction of the bidding unit:

Huayou Resources Pte. Ltd. Brief introduction

Huayou Resources Pte. Ltd. (Huayou Resources Co., Ltd.), registered in Singapore in April 2018, is a joint venture between Zhejiang Huayou Cobalt Co., Ltd. (stock code: SH603799) and Tongxiang Daoran Metal Mineral Co., Ltd. ((Tongxiang Daoran Metals And Minerals Co., Ltd.) to integrate industry and finance, promote industry and trade, and enhance supply chain management. The company is also the only company within the group that focuses on business, with a registered (actual) capital of US $15 million.

The overseas joint venture project has been formally approved by the Department of Commerce of Zhejiang Province and the Development and Reform Commission of Zhejiang Province.

Huayou Resources Pte. Ltd. Will focus on commodities and lithium new energy materials, combined with the strategic planning objectives of the parent company, adhere to trade-based, financial services as the core, resource development, smelting supporting as the development policy.

The main business contents of the joint venture company are as follows:

International trade in cobalt, copper, nickel, lithium and other non-ferrous metals;

Purchasing, financing and supply chain management of cobalt raw materials (such as cobalt raw materials, nickel raw materials);

Hedging management of price and exchange rate risk;

Sales of cobalt and nickel products in new energy materials;

Yan Huayou Cobalt Co., Ltd., the sales and management of its own products in the Democratic Republic of the Congo;

The registered capital of the joint venture company was fully put in place in October 2018 and began to operate formally.

Huayou Cobalt Co., Ltd., founded in 2002, headquartered in Tongxiang Economic Development Zone, Zhejiang Province, is a high-tech enterprise specializing in lithium power new energy materials manufacturing, cobalt new materials deep processing and cobalt and copper non-ferrous metal mining, separation and metallurgy. The company's main products are lithium cathode material precursors, cobalt chemicals and copper and nickel metals.

After more than ten years of development and accumulation, Huayou Cobalt Industry has completed the spatial layout of headquarter in Tongxiang, resource guarantee in Africa, manufacturing base in Quzhou and market in the world. It has formed a vertical integrated industrial structure with its own mineral resources as the guarantee, new cobalt materials as the core, copper and nickel products as the auxiliary, and mining, separation, metallurgy and deep processing of new materials as one. The company now owns and operates two copper and cobalt mining projects in the Democratic Republic of the Congo, with an annual output of about 100000 copper deposits and 10, 000 tons of cobalt raw materials, and controls the construction of a wet process project with an annual production capacity of 60, 000 tons of nickel metal in Indonesia. Quzhou and Tongxiang have two large-scale deep processing manufacturing bases in China.

Huayou Cobalt is currently the world's largest supplier of cobalt products, which accounts for about 20 per cent of the global market share and currently has a market capitalization of about 39 billion yuan.

Huayou Cobalt Co., Ltd. has a sales income of 9.653 billion yuan and a net profit of 1.896 billion yuan in 2017.

Huayou Cobalt Co., Ltd. has a sales income of 14.45 billion yuan and a net profit of 1.528 billion yuan in 2018.

Huayou Cobalt Co., Ltd. has a sales income of 18.853 billion yuan and a net profit of 119 million yuan in 2019.

Huayou Cobalt Co., Ltd. is expected to have a sales revenue of about 20 billion yuan in 2020.

Huayou Cobalt owns 70% of the shares in the joint venture through its wholly-owned subsidiary Huayou (Hong Kong) Co., Ltd., and will support the development of the joint venture through cash, quota, guarantee, business priority, resource sharing and other measures.

Explanation of Yangshan Copper Premium and bid acquisition process

SMM yangshan copper premium is an indicative price formed and issued by SMM in accordance with this methodology and can be used by both parties as a reference for spot trade settlement of Yangshan copper. This price reflects the spot trading price range of actual or potential transactions of US dollar copper at the time of the release of SMM Yangshan copper premium every full working day, including Yangshan copper premium warehouse receipt price and Yangshan copper premium bill of lading price.

Yangshan Copper Premium (Warehouse receipt): in Shanghai Yangshan Free Trade Port area (including Waigaoqiao), the transaction premium of LME registered Class An electrolytic copper benchmark brand compared to LME spot price;

Yangshan Copper Premium (B / L): CIF to Shanghai, LME registered Grade An Electrolytic Copper benchmark Brand physical transaction premium over LME spot price.

SMM collects the data information used to evaluate the premium of Yangshan copper by adopting the standard (that is, collecting the original data information that conforms to the SMM data standard policy), including the quotations of the buyers and sellers that have not closed on the day provided by the bid acquirer (that is, the data provider), the spot transaction price provided by the bid acquirer, and so on. The quantity of each transaction such as quotation or transaction of Yangshan copper that can be included in the standard is not less than 200 tons.

SMM price is based on the extensive collection of spot market quotations, enterprise information, industrial fundamentals, futures market quotations, macroeconomic trends and other major influencing factors (political, economic and natural, etc.), in which the spot market and enterprise information is the main basis. Adhering to the principle of "fairness, impartiality and openness", it has been an important indicator for direct use or reference in the settlement of transactions in the industry for many years.

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