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CNIA For the First Time Released Copper and Aluminum Industry Prosperity Index

In order to promptly and accurately provide authoritative and standardized monitoring and pre-warning info for copper & aluminum industry to government departments at all levels, all nonferrous metals enterprises and all social circles, on November 12, the China Nonferrous Metals Industry Association held a press conference at Jingxi Hotel to release CNIA Copper Industry Monthly Prosperity Index and CNIA Aluminum Smelting Industry Prosperity Index for October 2015.

It has been learned that this time’s index announcement is the first released monthly prosperity index for single metal variety following the release of Chinese Economy Nonferrous Industry Monthly Prosperity Index on April 16, 2014, which holds crucial importance for the development of copper and aluminum industry.

Ren Xudong, Executive Vice President of the China Nonferrous Metals Industry Association, Section Chief Zheng Yulan of the Finance Office under the Management Bureau of the State Council’s State-owned Assets Supervision and Administration Commission, Section Chief Xie Sanming of the Bureau of Operation Monitoring and Coordination of the Ministry of Industry and Information Technology, attended the meeting and delivered speeches.

Jia Mingxing, Vice President and Secretary-general of the China Nonferrous Metals Industry Association, announced information related to “CNIA Copper Industry Prosperity Index” and “CNIA Aluminum Smelting Industry Prosperity Index”, and answered questions from journalists. Wang Huajun, Deputy Secretary-general of the Association and Director of the Information Statistics Department, presided over the release meeting.

In his address, Ren Xudong first introduced operation and features of the nonferrous metals industry this year.

He said, this year the operation of the nonferrous metals industry mainly presented four features: Stable production operation, falling investment growth margin, sluggish market price, and declining enterprise performance. From January to September, industrial added value of nonferrous metals enterprises grew by 9.3%, the growth margin dropped by 2.5 percentage points than that of the same period last year, but 3.1 percentage points higher than that of national industrial added value. The output of ten kinds of nonferrous metals is 38.24 million tonnes, up by 9% on Y-o-Y basis, 2.4 percentage points higher than that of the same period last year. The nonferrous metals industry completed 509.6 billion yuan of fixed asset investment, up by 0.04% on Y-o-Y basis. Total trading amount of nonferrous metals import/export was USD 84.4 billion, down by 12.5% on Y-o-Y basis. Nonferrous metals enterprises above designated size fulfilled 3.8 trillion yuan of income from main business, up by 1.6% on Y-o-Y basis, the growth margin dropped by 7.7 percentage points than that of the same period last year. Fulfilled total profit of 95.5 billion yuan, down by 4.8% on Y-o-Y basis. From January to October, domestic copper, aluminum, lead and zinc prices respectively dropped by 15.5% than the same period last year.

According to preliminary estimate, in 2015 added value of nonferrous metals industry will grow by about 9%, output of ten kinds of nonferrous metals will top 51 million tonnes. Judging from current domestic and overseas economic situations, since factors previously supporting industrial development have weakened, and new supporting factors are still in the process of development, the adjustment of nonferrous metals market will continue for one to two years. This will constitute corresponding pressure on the rally of nonferrous metals prices, enterprise economic benefits and fixed asset investment.

According to Ren Xudong, the compilation and release of copper, aluminum prosperity index holds crucial significance. Previously the “Chinese Economy Nonferrous Metals Industry Monthly Prosperity Index” jointly released by CNIA and relevant departments received widespread attention and adoption by relevant government departments, large number of nonferrous metals enterprises and all social circles. Whereas copper and aluminum are important metal varieties receiving focused concern from competent government departments, large number of nonferrous metals enterprises and all social circles. The income from main business of copper industry accounts for about 35% in income from main business of nonferrous metals enterprises; the income from main business of aluminum industry accounts for about 30% in income from main business of nonferrous metals enterprises, wherein crude aluminum output accounts for 60% above in the output of ten nonferrous metals. Consequently, on the basis of releasing “Chinese Economy Nonferrous Metals Industry Monthly Prosperity Index”, with support from the State-owned Assets Supervision and Administration Commission, the National Development and Reform Commission, the MIIT, and the National Bureau of Statistics, CNIA also studied and compiled prosperity index of copper and aluminum metal varieties, after trial operation in the industry and and amendment, today it formally announced copper and aluminum prosperity index.

Ren Xudong said in the future CNIA would regularly publish copper and aluminum prosperity index, study and compile prosperity index of lead-zinc, tungsten and molybdenum metal varieties, gradually improve prosperity index system of the nonferrous metals industry.

Representatives from other ministries and commissions fully acknowledged the Association’s index work in their speeches respectively.

It has been learned that like the previously released Chinese Economy Nonferrous Metals Industry Prosperity Index, copper and aluminum industry prosperity indexes divide industrial economy operation status into 5 grades of “excessively Hot, Hottish, Normal, Coldish and Excessively Cold”, which are respectively represented by 5 colors of ”Red, Yellow, Green, Pale Blue and Blue” in prosperity light zone.

According to Jia Mingxing, the CNIA copper industry prosperity index released in October indicated that, since October 2014 the prosperity index fell continually, in October the prosperity index was 22.59, approaching the lower threshold of “coldish” zone.

Among 9 indexes consisting of CNIA Copper Industry Prosperity Index: import volume index, housing sales area are within “Normal” zone; LME copper settlement price, M2, total output, income from main business and total profit remain in “coldish” zone; total investment and power & cable index are within “excessive cold” zone.

According to CNIA Aluminum Smelting Industry Prosperity Index, since 2015, the prosperity index stayed within “coldish” zone, since the second quarter it fell continually, in October the prosperity index dropped to 20.81, and the falling margin steadily expanded, and was approaching the lower threshold of “coldish” zone. Despite signs of stabilizing for some indexes, the industry will still find it difficult to extricate from the pattern of hovering at low level.

Among the 10 indexes consisting of Aluminum Smelting Industry Prosperity Index, 3 indexes remain in “Normal” zone, which are respectively electrolytic aluminum output, aluminum oxide output, and commercial housing sales area; other 7 indexes remain in “coldish” zone, they are respectively LME aluminum settlement price, M2, aluminum smelting total investment amount, electricity generation, income from main business, total profit, and total export quantity of aluminum products.