Analysis: risks ahead China's nonferrous metal industry

Worldwide economic risks and China's tight economic measures are anticipated to exert negative influence on China's nonferrous metal industry.

Credit crunch triggered by the U.S. real estate industry is passing on its influence to developing countries including China, adding risks on nonferrous metal industry from macro-economic prospective.

Influenced by credit crisis, nonferrous metals in late March ever experienced price nose-dive on international futures market.

Also affected by worldwide crisis, such preliminary products as crude oil, iron ore, copper and alumina are undergoing price rise, pushing up production cost of nonferrous metals.

Under such circumstances, international giants hasten acquisition of small metal companies, further reinforcing their monopolistic position but weakening China's enterprises weight on international market.

Domestically, the tight economic measures to be implemented this year will deteriorate the situation for nonferrous metal industry. China has lifted doorsill for entering industries related to manufacture copper, aluminum, lead, zinc, tungsten, tin and antimony in a bid to wash out backward production capacity.

Besides, other factors such as RMB appreciation and tight credit would affect the development of nonferrous industry.

Snow disaster that hit southern China this winter brought huge economic losses to nonferrous metal enterprises.

According to statistics, 28 electrolytic aluminum makers suffered more than 1.6 million tons of production capacity. A majority of nonferrous metal enterprises in Hunan province had to halt production.

Other heavyweight enterprises such as Jiangxi Copper Corporation, Tongling Nonferrous Metals Group, Daye Nonferrous Metals Company, Jingxi Tungsten Industry Group and Zunyi Titanium were all influenced production. – China Mining