China Non-Ferrous Metal Industry Report, 2008

At present, China's non-ferrous metal industry has a momentum of a slowdown growth after years of rapid growth. The reasons for the slower growth in the industry are as follows. Firstly, China's non-ferrous metal production and consumption accounts for about 30% of the global total, meaning that per capita consumption in China has surpassed the global average level. Secondly, cost continues to rise, and corporate profitability is declining after earlier rises, which gradually dampens the corporate enthusiasm for sustained fast growth in capacity expansion. Thirdly, extensive economic growth has led to a tight supply of resources and energy in China and China has continuously rolled out regulatory and control policies, which will help the industry change the growth mode with focus on capacity expansion, and step onto the path of sustained development.

It is forecast that China's output of non-ferrous metals will grow at a rate of around 10% in the period 2008-2010, even lower than 10%, and meanwhile growth rate of consumption will slow down accordingly.

After years of rapid rises, non-ferrous metal prices have begun dividing. Some of non-ferrous metal prices have dropped due to the impact of supply growth, and some have still remained at high level because of tight supply. This report is optimistic about future prices of noble metals, aluminum, tin and rare earths, and is cautious about future prices of copper, zinc, lead, nickel and molybdenum. Detailed information is given in Chapter IV.

With the rapid development of non-ferrous metal industry in recent years, large-sized corporations have taken the initiative in the rapid growth. Aluminum Corporation of China, for instance, will dominate the future development of China electrolyte aluminum industry. The four gold producers, Zhongjin Gold Co, Shandong Gold Co, Zhaojin Industry and Zijin Mining Group, will share the gold market, while the copper market will be controlled by Tongling Nonferrous Metals Group Holdings Co., Jiangxi Copper Industry Co. and Yunnan Copper Industry Co. Detailed information on China's key non-ferrous metal producers is provided in Chapter VI.

China's investment in overseas market by its non-ferrous metal producers is increasingly active, but they are still at initial stage and still face great risk. In a long term, it is an inevitable trend for China's non-ferrous metal companies to tap overseas market and participant in global competition in the future.

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