Chinese-funded enterprises are gradually becoming an important force in promoting the development of the world's non-ferrous metal resources. At the 3rd Minmetals Industry Finance Forum held recently, Ge Honglin, president of China Nonferrous Metals Industry Association and former chairman of Aluminum Corporation of China, mentioned this.
He mentioned a set of data: as of 2023, Chinese enterprises have more than 170 projects in more than 40 countries and regions, and key Chinese-funded enterprises have overseas assets of more than 950 billion yuan, sales revenue of more than 760 billion yuan, and nearly 100,000 employees.
In fact, some of the disclosures of large listed companies in the field of non-ferrous metals also reflect this.
Zijin Mining (601899.SH/2899.HK) mentioned in its 2023 annual report that the company's mineral products have grown at an average annual compound annual growth rate of about 30% for copper and more than 15% for gold since 2020, making it the only company among the world's 15 top mining companies to achieve the output guidance for the actual output of copper mines for three consecutive years, and one of the fastest-growing enterprises in mineral copper and gold production among the leading mining enterprises.
China Molybdenum (SH.603993/HK.03993), another overseas mining company with an eye-catching layout, also pointed out in its 2024 interim report that the company's copper and cobalt production doubled in the first half of this year, making it the largest mining company contributing to the increase in copper production capacity in the world in the first half of the year, while continuing to rank as the world's largest cobalt producer.
However, looking at the non-ferrous metals industry, Ge Honglin believes that there are still multiple changes and challenges, including the security and stability of mineral resources. At the same time, he took the electrolytic aluminum industry, which has personally experienced the entire reform process, as an example, and called on the "self-discipline" of the industry's production capacity to not only develop the new quality productivity of the industry, but also to accelerate the transformation and upgrading of the industry.
The focus of resource development has shifted overseas, and the global attention to critical minerals is rising
Ge Honglin said that at present, China's non-ferrous metal industry has multiple changes.
One of the changes lies in the change in the focus of industrial development, "First of all, the focus of resource development has shifted overseas. "In addition to the above-mentioned set of data, industry statistics also show that the equity reserves and production of overseas mineral resources such as copper, aluminum, nickel and cobalt have exceeded those in China.
At the same time, the field of overseas cooperation between Chinese enterprises is also expanding, "China's overseas production capacity of copper processing materials has reached 1.2 million tons, accounting for about 10% of the mainland's total copper resource imports." "In the past two years, the new energy field has also shown that the battery industry is also accelerating its global layout.
However, Ge Honglin reminded that with the continuous expansion of China's demand for non-ferrous metal mineral resources, how to safely, adequately and stably supply mineral resources is still the primary problem plaguing the development of the industry.
According to the data cited, the physical volume of non-ferrous metal mineral products imported by the mainland will exceed 200 million tons in 2023, and the overall "external mining ratio" of the non-ferrous metal industry will reach 58%. Among the 22 kinds of non-ferrous metal minerals, 18 kinds rely on imports, and 12 kinds of minerals account for more than 50% of the imports. Among the traditional bulk metals, the import volume of bulk minerals such as copper ore and bauxite has doubled in the past 10 years; The proportion of imports of new energy minerals such as nickel, cobalt and lithium is larger.
In addition to the development of resources, Ge Honglin also said that the change in the focus of industrial development also shows a shift to the field of materials. Green energy, energy storage, electrification, lightweight, artificial intelligence, computing power, etc. all need non-ferrous materials to support, and these fields are the focus of the future attention and development of the non-ferrous industry.
At the same time, the development model of the non-ferrous metal industry has also shown changes. Ge Honglin mentioned that in recent years, in accordance with the unified planning and deployment of the state, with the joint efforts of local governments and leading enterprises in the industry, a number of unique industrial clusters have been formed, "showing changes in the clustered, centralized and full-chain development pattern." ”
These include copper industry clusters such as Yingtan in Jiangxi, Tongling in Anhui, Daye in Hubei, Jinchuan in Gansu, and Longyan in Fujian; Shandong Binzhou and Liaocheng, Inner Mongolia Baotou and Huolin Gol, Guangdong Foshan, Shandong Longkou and Linqu, Henan Gongyi and other industrial chain integrated aluminum industry clusters; Jiangxi Ganzhou, Hunan Zhuzhou, Fujian Xiamen, Sichuan Chengdu-Chongqing Tungsten Industrial Cluster and Henan Anyang Lead and Zinc Recycling Industrial Cluster, etc.
It is worth noting that in the field of non-ferrous metals, key resources and technologies have become the focus of international games. Especially in the past one or two years, the control of key minerals, key technologies and key equipment by relevant countries has been continuously strengthened. "Non-economic factors such as national security and public safety are increasing their influence in the division of labor in the global industrial chain." Ge Honglin emphasized.
Previously, on November 10, 2022, the International Energy Agency (IEA) released the "Critical Mineral Resources Policy Tracker", which showed that 25 countries and regions around the world (including major producers and consumers of critical mineral resources) have implemented nearly 200 policies and regulations, and more than 100 of them have been promulgated in the past few years. The IEA's Critical Minerals Market Review 2023 report, released last year, also mentioned that many interventions have an impact on trade and investment, and some include export restrictions. Since 2009, the number of global export restrictions on critical raw materials has increased fivefold.
It is worth mentioning that on April 26 this year, the United Nations announced the establishment of the "Energy Transition Critical Minerals Group". The group brings together governments, organizations and UN agencies to develop a common set of voluntary principles to protect environmental and social standards and thus ensure justice in the energy transition.
"This underscores the growing global focus on 'critical minerals'." Ge Honglin stressed that in the future, for China's mining or overseas investment, especially in the field of "critical minerals" related to foreign investment and cooperation, systemic risks are rising, "Identifying risks and responding to risks has gradually become one of the most important topics for the internationalization and globalization of Chinese enterprises." ”
The investment in new energy copper foil materials is overheated, what is the solution to "involution"?
At the above-mentioned forum site, the surging news (www.thepaper.cn) reporter noticed that whether it is a financial institution serving the non-ferrous metal industry or a material manufacturer in the field of new energy on the hot track, "involution" is also their high-frequency word.
The surging news reporter has also recently paid attention to the fact that Jiayuan Technology (688388. SH) recently announced that the company recently signed the "Letter of Intent Termination Agreement" with the People's Government of Meixian District, Meizhou City on the "Jiayuan Technology High-end Copper Foil Construction Project with an Annual Output of 50,000 Tons". This means that the project planned nearly three years ago has not been implemented.
One of the objective backgrounds for the cancellation of the project is that Jiayuan Technology's performance is under pressure. Further analysis, is that the golden age of the lithium battery copper foil industry did not last long, with the release of a large amount of production capacity, the profitability of copper foil manufacturers generally declined sharply.
Taking Jiayuan Technology as an example, in the first half of this year, the company's operating income was 2.423 billion yuan, an increase of 16.62% compared with the same period last year (year-on-year); The net profit attributable to shareholders of listed companies was -105 million yuan, a significant decrease of 595.15% year-on-year. Regarding the sharp decline in performance, Jiayuan Technology said that it was mainly due to the intensification of market competition, the decline in processing fees, changes in supply and demand, fluctuations in raw material prices, changes in the overall economic situation and industry cycles, and other factors, resulting in a large decline in the company's gross profit margin.
At the 2024 semi-annual results briefing, Liao Pingyuan, chairman of Jiayuan Technology, mentioned, "With the upgrading of market competition, the profitability of copper foil manufacturers has declined significantly, and the anti-risk ability of small and medium-sized manufacturers is poor. ”
Ge Honglin also mentioned the problem of overheating investment in the electrolytic copper foil industry at the above-mentioned forum. With the continuous influx of venture capital into the new energy industry, some processing fields are hot, and the publicity of some brokerages has intensified blind investment, and the publicity of the application field is divorced from market demand, and the actual demand growth rate is much lower than the rapid expansion of new production capacity. Taking electrolytic copper foil as an example, the output of electrolytic copper foil in mainland China will be 875,000 tons in 2023, but the actual capacity utilization rate is less than 70%, and the capacity utilization rate is expected to be only about 50% in 2024. Narrow track, crowded is followed by stampede, battery aluminum foil surplus can also be transformed into the production of air conditioning foil, electrolytic copper foil once on the surface, it is difficult to turn around, will inevitably worsen the competition.
Ge Honglin pointed out that the current traditional manufacturing industry in the mainland is facing many hot issues, not only to develop the new quality of the industry's productivity, but also to accelerate the transformation and upgrading of the industry. "If the industry is disorderly expansion, blind development, and enterprise losses, the focus of enterprises will inevitably shift to fighting prices and ensuring survival, how to empower the development of new quality productivity in the industry?"
Taking China's 15-year macro-control of electrolytic aluminum production capacity from 2002 to 2017 as an example, it mentioned that "it is a pity that there is a strange circle of 'regulation-expansion-readjustment-reexpansion', which eventually leads to a comprehensive loss of the electrolytic aluminum industry." The ultimate way out for this industry lies in "legally determining the capacity ceiling, market-oriented capacity replacement, and accelerating the pace of clearing backward production capacity." ”
In 2016, the electrolytic aluminum industry fell into a dark moment, and the ton price fell to about 9,000 yuan; The latest electrolytic aluminum ton price is standing at nearly 20,000 yuan.
Ge Honglin emphasized that throughout the entire reform process, a profound lesson can be given, "the more production capacity of the industry, the better." "Only industries with industry self-discipline can shift their focus to science and technology cost reduction and technological transformation, so as to grow into an internationally competitive industry.