Development environment: continuously introducing favorable policies to promote industry development:

        All metals except iron, chromium, and manganese are called non-ferrous metals. Nonferrous metals can be divided into light metals, heavy metals, precious metals, semimetals, and rare metals. The ten commonly used non-ferrous metals are copper, aluminum, lead, zinc, nickel, tin, antimony, mercury, magnesium, and titanium. Nonferrous metals are the fundamental materials for the development of the national economy. A large part of industries such as aerospace, automotive, mechanical engineering, energy, telecommunications, construction, and consumer electronics are based on the production of non-ferrous metal materials. With the rapid development of modern chemical industry, agriculture, and science and technology, non-ferrous metals are becoming increasingly important for human development. They are not only important strategic materials and means of production in the world, but also irreplaceable important materials in human life.

        The upstream of the non-ferrous metal industry chain is mainly the extraction of mineral resources. The main enterprises that extract non-ferrous metals include Zijin Mining, China Aluminum, Tongling Nonferrous, Ganfeng Lithium, etc. The midstream of the industry chain is mainly the smelting and processing of non-ferrous metals. Currently, China's smelting and processing end has a high degree of integration, mainly represented by enterprises such as MCC Group, Minfa Aluminum, Mingtai Aluminum, Xinjiang Zhonghe, etc. The downstream of the industry chain is the construction of infrastructure The main representative enterprises in mechanical manufacturing include China FAW, Shanghai Volkswagen, and Sany Heavy Industry.

        In order to achieve stable growth in the non-ferrous metal industry, Chinese government departments have issued a series of policies and development plans. In August 2023, the Ministry of Industry and Information Technology released the "Work Plan for Stable Growth in the Nonferrous Metals Industry", which mentioned that the development goal of China's non-ferrous metals from 2023 to 2024 is to maintain stable growth in the production of major products such as copper and aluminum, with an average annual increase of about 5% in the production of ten non-ferrous metals, and a basic dynamic balance between supply and demand has been achieved. Operating revenue continues to grow, green and intelligent transformation and upgrading are accelerating, and the average annual energy consumption per unit of copper, lead and other smelting products is decreasing by more than 2%. Strive to increase the added value of the non-ferrous metal industry by about 5.5% year-on-year in 2023 and over 5.5% in 2024. In November 2022, the National Development and Reform Commission proposed in the "Implementation Plan for Carbon Peaking in the Nonferrous Metals Industry" to promote the high-quality development of the machinery and equipment industry, the safe, green and efficient development of the petrochemical industry, and the renewal and renovation of old agricultural machinery, engineering machinery, and old ships. In October 2022, the National Development and Reform Commission emphasized the application of high-tech and new materials in the field of non-ferrous metals in the Catalogue of Industries Encouraging Foreign Investment (2022 Edition). In March 2021, the National Development and Reform Commission proposed the "Guiding Opinions on the Comprehensive Utilization of Bulk Solid Waste during the 14th Five Year Plan", which emphasized promoting the comprehensive utilization of non-ferrous metal mineral resources and valuable gradient recycling, and promoting the coordinated development of industries such as bulk solid waste and non-ferrous metal industry.

Development status: Affected by the environment, prices have risen:

        According to data released by the China Nonferrous Metals Industry Association, the production of ten common non-ferrous metals in China has shown an increasing trend year by year, driven by lower end demand and increased consumption, with a relatively high growth rate. The production of ten commonly used non-ferrous metals in 2022 was 67.936 million tons, an increase of 4.90% compared to the same period in 2021.

       The concentration of China's copper smelting industry is relatively high, and the gap between leading enterprises is relatively small; The concentration of China's electrolytic aluminum industry is low, and the industry is relatively scattered, mainly in the early stage of non-ferrous metal development in China. The expansion of electrolytic aluminum production capacity is severe, the industry's technical barriers are low, and there are many small and medium-sized enterprises participating in the industry, leading to the dispersion of market concentration in the industry. In 2022, global nonferrous metal prices fluctuated greatly. In the first half of the year, copper prices continued to rise due to the Russia-Ukraine conflict, energy crisis, South American supply disturbance and other factors. In the first quarter of 2022, copper prices hit a record high. In the second quarter, prices retreated under the influence of the Federal Reserve's interest rate increase. In 2022, the annual average spot price of copper in China was 67470 yuan/ton, 1.5% lower than that of the previous year. The aluminum industry is an important basic industry in the country, and aluminum oxide and raw aluminum, as important basic raw materials, are closely related to industries such as electromechanical, power, aerospace, shipbuilding, etc. Their product prices fluctuate periodically with macroeconomic fluctuations both domestically and internationally. The average annual spot price of aluminum in China in 2022 was 20006 yuan/ton, an increase of 5.6% compared to the previous year.

        The growth rate of China's non-ferrous metal import and export trade has accelerated in the past two years. According to customs statistics, the total amount of non-ferrous metal import and export trade in 2022 was 327.33 billion US dollars, an increase of 20.2% compared to the previous year. Before 2020, the import amount of non-ferrous metals in China fluctuated around 100 billion US dollars. In 2021, the import amount of non-ferrous metals was 215.18 billion US dollars, an increase of 89.37% year-on-year. In 2022, the import value of non-ferrous metals was 261.05 billion US dollars, an increase of 21.32% year-on-year. The export value showed a decreasing trend year by year before 2021, but increased significantly after 2021. In 2021, the export of non-ferrous metals reached 46.45 billion US dollars, an increase of 81.1% compared to the same period in 2020. In 2022, the export of non-ferrous metals reached 66.28 billion US dollars, an increase of 42.69% year-on-year.

 Enterprise landscape: fierce competition and high downstream pressure in the industry:

        At present, the overall characteristic of competition in China's non-ferrous metal industry is fierce competition, with high downstream pressure on the industry chain. Due to the monopoly of some scarce metals by the state, there are fewer enterprises that can participate in competition, and the barriers to entry into the industry are relatively high. From the perspective of existing competitors in most segmented industries, the non-ferrous metal industry has strong resource characteristics, with a large number of non-ferrous metal enterprises distributed in resource intensive areas. In addition, China has a large reserve of copper, aluminum and other metal resources, which also encourages a large number of enterprises with related non-ferrous metal processing and smelting as their main business. Representative enterprises mainly include Zijin Mining, China Aluminum, Tongling Nonferrous, Ganfeng Lithium, etc.

        Zijin Mining is a large multinational mining group engaged in the exploration, development, engineering design, and technological application research of metal mineral resources such as copper, gold, zinc, and lithium worldwide. It is one of the enterprises in China that controls the most metal mineral resources. In recent years, the operating revenue of Zijin Mining has maintained a high-speed growth trend. In 2022, the operating revenue of Zijin Mining was 270.3 billion yuan, an increase of 20% compared to 2021. Before 2019, the production of mineral gold by Zijin Mining was greater than that of mineral copper. Starting from 2020, Zijin Mining began to vigorously develop mineral copper, and the production of mineral copper achieved rapid growth. In 2022, the production of mineral copper was 880000 tons, an increase of 300000 tons compared to 2021, a year-on-year increase of 51.72%.

        China Aluminum Corporation Limited is the only large-scale aluminum production and operation enterprise in the Chinese aluminum industry that integrates bauxite exploration, mining, production and sales of alumina, primary aluminum, and aluminum processing, as well as technological research and development. It is the largest producer of alumina, primary aluminum, and aluminum processing materials in China, the second largest alumina producer and the third largest primary aluminum producer in the world. In 2021, affected by the rise in aluminum prices, China Aluminum achieved a significant increase in operating revenue. The operating revenue in 2021 was 298.8 billion yuan, an increase of 60.65% compared to the same period last year. In 2022, China Aluminum's operating revenue was 290.9 billion yuan, a decrease of 8 billion yuan compared to the previous year, a decrease of 2.64%. Affected by the rise in aluminum prices, the production of China's aluminum industry's main products, aluminum oxide and electrolytic aluminum, has shown a downward trend in recent years. In 2022, the production of aluminum oxide was 13.51 million tons, a decrease of 300000 tons from the previous year. The production of electrolytic aluminum has slightly increased, reaching 4.17 million tons, an increase of 10.03% compared to the same period last year.

Development trend: Green and intelligent reform, promoting industrial upgrading:

1. Improving traditional production models and promoting sustainable development

        With the increasing awareness of environmental protection, the non-ferrous metal industry will increasingly focus on sustainable development and environmental protection. Traditional non-ferrous metal production is often accompanied by a large amount of energy consumption and environmental pollution, but now more and more enterprises are adopting clean production technology to reduce energy consumption and waste emissions. For example, innovation in wastewater treatment and exhaust gas treatment technologies in electrolytic copper production can help reduce environmental impact. With technological innovation, recycling non-ferrous metals from waste such as electronic devices and vehicles has become more feasible. Recycling not only helps to reduce environmental burden, but also reduces dependence on raw ores. At the same time, the government has issued a series of policy support for the development of non-ferrous metals. The support of government regulations and the improvement of consumer environmental awareness will further promote the development of sustainable mining and recycling. The non-ferrous metal industry can not only achieve economic benefits, but also take solid steps on the path of sustainable development.

2. Digital reform to improve production efficiency

        Digital technology has had a huge impact in various fields, and the non-ferrous metal industry is no exception. The application of intelligent manufacturing and Internet of Things technology can improve production efficiency, reduce production costs, and achieve precise control of the production process. Through sensors, data analysis and other means, enterprises can achieve real-time monitoring and predictive maintenance of equipment status, improving the stability and reliability of production lines. Non ferrous metals, as important structural materials, have a wide range of applications in aerospace, automotive manufacturing, electronics industry, and other fields. With the advancement of technology, the demand for material properties is increasing, which has driven the research and development of new alloys and composite materials. For example, magnesium alloys have broad application prospects in the field of automotive manufacturing due to their lightweight and high-strength properties.

3. Strengthen international cooperation and optimize supply chain

        The non-ferrous metal industry has a high degree of internationalization, and global market fluctuations and policy changes can have an impact on the industry. International cooperation and supply chain optimization will help reduce risks and jointly address market challenges. Through cooperation methods such as technological exchange and resource sharing, enterprises can better adapt to market changes. With the improvement of people's living standards, the requirements for the quality and appearance of consumer goods are also constantly upgrading. This will affect the demand structure of the non-ferrous metal industry and encourage enterprises to provide higher quality and high value-added products.