Do a good job in ensuring the supply and price of bulk commodities
May 7, 2022
Do a good job in ensuring the supply and price of bulk commodities –
Q&A at the press conference on the economic operation of the non-ferrous metal industry in the first quarter
On April 28, the China Nonferrous Metals Industry Association held a press conference on the economic operation of the nonferrous metal industry in the first quarter in the form of video. Jia Mingxing, member of the Standing Committee of the Party Committee and Vice President of China Nonferrous Metals Industry Association, introduced the relevant situation and answered questions from media reporters and business representatives.
China Securities Journal: In March this year, the international nickel price fluctuated violently, which not only caused serious damage to global nickel entities, but also threatened the safety of my country's nickel supply chain. How should my country ensure supply and price stability in the nickel industry? ?
Jia Mingxing: The fluctuation of nickel price in March is a major event in the non-ferrous metal industry and has a great impact. In accordance with the requirements of the Party Central Committee and the State Council on ensuring supply and price stability of bulk commodities, the Nonferrous Metals Association has strengthened industry self-discipline, stabilized market expectations, and prevented malicious speculation and irrational fluctuations in nickel prices.
One is to promote the establishment of a diversified strategic mineral resource reserve system. Due to the lack of nickel resources in my country, the situation of massive import of nickel raw materials will exist for a long time. Therefore, it is necessary to make overall plans for the construction of the national reserve system. The government and key enterprises explore and establish a reserve system that combines strategic reserves and commercial reserves to effectively prevent and resolve various risks and challenges, and further ensure the security of the entire industry chain and supply chain.
The second is to enhance the international pricing power of my country's bulk commodities. During the period of abnormal fluctuations in international nickel prices, my country's nickel futures ran smoothly and withstood the test of extreme market conditions. The price discovery function was effectively exerted, and during the suspension of trading in the international market, it provided an important reference price for the world. In order to further enhance the international price influence of my country's nickel industry, it is recommended to study and explore the internationalization scheme of nickel futures and promote the formation of a more reasonable international pricing mechanism.
"China Nonferrous Metals News": On April 10, the "Opinions of the Central Committee of the Communist Party of China and the State Council on Accelerating the Construction of a Large National Market" was released. What aspects will this opinion promote the high-quality development of the non-ferrous metal industry? How will the Nonferrous Metals Association help the construction of a unified large market for nonferrous metals in my country?
Jia Mingxing: This opinion is the basic support and internal requirement for building a new development pattern. It is a good policy to break local protection and market segmentation, break through the key blockages restricting the economic cycle, and promote the smooth flow of commodity factor resources on a larger scale.
To speed up the construction of a large national unified market, we must base ourselves on domestic demand and smooth circulation, make both breakthroughs, improve the system, have an effective market, a promising government, and advance systematically and steadily; A stable, fair, transparent and predictable business environment will further reduce market transaction costs, promote technological innovation and industrial upgrading, and foster new advantages in participating in international competition and cooperation.
In the development process of my country's non-ferrous metal industry, there will be problems such as unbalanced local resources. However, some unscientific local policies have hindered the construction of a unified national market for non-ferrous metals in my country, resulting in restricted industry development. In addition, the "double carbon" problem has also attracted much attention. This is not a matter of a certain province or region, but a unified "game of chess" across the country.
Therefore, building a unified national market can accelerate the high-quality development of the non-ferrous metal industry, and the technological innovation capability will also be stronger.
"Economic Information Daily": What do you think of this round of battery-grade lithium carbonate prices soaring? What should my country's lithium industry enterprises pay attention to? What are the arrangements for the subsequent pricing mechanism?
Jia Mingxing: At this stage, the price of lithium carbonate has risen very much, and it has recently corrected a bit. About 60% of my country's lithium ore is imported. The main reasons for the increase in prices: From the perspective of market demand, the demand for lithium from new energy sources has increased significantly; from the perspective of market supply, the supply channels are not smooth, and some countries have successively issued some policies for lithium mining, which has driven up lithium price.
At present, the price of lithium has been separated from the fundamentals of the market, and it is hoped that it can return to the industry itself. On the supply and demand side, we still have some work to do. We hope to increase investment in scientific and technological innovation in resource extraction to make the supply more abundant. As market demand continues to grow, lithium prices will remain on an upward trend in the short term.
The Nonferrous Metals Association and the Lithium Industry Branch are studying related work, hoping to establish a mechanism that can ensure stable lithium prices.
"China Nonferrous Metals" magazine: Since the beginning of this year, the nonferrous metal industry has attracted more and more attention. Among them are the panic of the large fluctuation of commodity prices, the continuous trouble of the "two high and one capital" label, and the good supply in the first quarter of the war against the "epidemic". A happy event for the opening and the landing of Shenzhou 11 with high-precision materials. With the heightened attention, how should we understand the troubles of the non-ferrous industry and its role in the national economy? What arrangements does the association have for leading such awareness?
Jia Mingxing: After decades of rapid development, my country's non-ferrous metal industry is currently huge, but there are also some problems.
One is the insufficient supply of resources. Therefore, in terms of work layout, we must not only give full play to the large domestic market, but also make good use of the international market to ensure the supply of resources. Second, non-ferrous metals play a very important role in aerospace and military industries. Key components in many important fields require non-ferrous metals. With the improvement of human living standards and the rapid development of national defense and military industries, the demand for non-ferrous metals will increase. Therefore, we are also exploring how to ensure the supply of non-ferrous metal resources.
The recycled non-ferrous metal industry is also an important field with a good momentum of development. At present, among the total of more than 60 million tons of non-ferrous metals, there are about 15 million tons of secondary metals. Recycled metals can not only ensure the supply of resources, but also reduce pollution, and its development prospects are bright.
The Nonferrous Metals Association actively carries out relevant research in accordance with the deployment of relevant state departments, and we are full of confidence in the development of nonferrous metals.
"Worker's Daily": In the past two years, non-ferrous metal smelting sulfuric acid production accounts for an increasing proportion of the national sulfuric acid, and the price of sulfuric acid is also rising this year. What do you think of the future development trend of smelting acid?
Jia Mingxing: The main factor that affects the price of sulfuric acid is energy. The price of sulfur has risen sharply, and the use of sulfur to produce acid has led to an increase in the price of sulfuric acid; coupled with the peak season for phosphate fertilizer consumption, the downstream demand for acid has also increased significantly. The superposition of two factors has caused the price of sulfuric acid to continue to rise.
For non-ferrous smelting enterprises, recycling sulfur can reduce pollution, which is a good thing. Moreover, as a by-product of sulfuric acid, the price of sulfuric acid will rise, and the efficiency of enterprises will also be greatly improved. Affected by cyclical factors, the price of sulfuric acid fluctuates greatly. However, we hope that the price of sulfuric acid can be maintained in a reasonable and stable range, because its own value is relatively high.
From the current point of view, the international situation is still turbulent, and energy has been greatly affected. Therefore, the high price of sulfuric acid will remain high for a period of time.
Jiangxi Copper Group: At present, under the epidemic situation, the downward pressure on the national economy is relatively large. What aspects will the later-stage stable growth policy focus more on? In this context, where are the development opportunities for the copper industry?
Jia Mingxing: The epidemic has a great impact on our industry. Overall, the copper industry is mainly affected by both ends. One is the supply side. The epidemic has a great impact on the supply of the copper industry. In particular, my country lacks copper resources, and the main varieties are highly dependent on foreign countries. Especially some underdeveloped areas in South America are the main supply areas of my country's non-ferrous metal resources, and the epidemic has a great impact on the supply. big impact. At present, the main reason for the sharp rise in the price of the whole metal is also here, and this situation may continue. The second is to stabilize the growth end. At present, the downward pressure on the economy is very great, and the epidemic has a great impact on the downward pressure on the economy. At present, although the non-ferrous industry performed well last year, including the first quarter of this year, looking forward, the downward pressure on the economy is still great. At the same time, the epidemic has a great impact on downstream industries. Therefore, my country proposes that steady growth is in line with the actual development needs. We hope that the downstream of the non-ferrous industry will be stable, and the demand will be stable, which will be better for the development of the industry.
Overall, in the copper industry, copper prices are the vane of non-ferrous metals. High gold prices and oil prices will boost the price of non-ferrous metals. Therefore, the financial properties of copper are also very obvious, and the rise in gold prices will also boost the price of copper. Overall, I think copper prices will run at a high level, which is also an indisputable fact. For the copper industry, it is still necessary to increase the exploration of domestic resources as much as possible, explore more domestic copper resources to stabilize prices, and not allow copper prices to rise too fast. If the price is too high, it will have a great impact on enterprises and the industry. It is hoped that the overall price of copper can be maintained within a reasonable range.
Aluminum Corporation of China: In the first quarter of this year, the import volume of bauxite reached a record high, and at the same time, the export volume also maintained a good growth. In the first quarter, the export of aluminum products increased by 23%, the growth rate was very fast and relatively strong. At present, the outbreak of the epidemic in many places across the country has caused a certain impact on the production, sales and logistics of the entire industrial chain. Many downstream aluminum processing enterprises and terminal fields have insufficient operating rates. Under this circumstance, can my country's aluminum exports continue to grow in the second quarter?
JiaMingxing: In the first quarter, my country's aluminum exports increased significantly, which was larger than that in previous years. The main factors: First, the current aluminum price is upside down, which forms a great support for aluminum exports; second, my country's aluminum processing capacity is very high; third, our aluminum processing costs are very low. Therefore, in the short term, aluminum supports the strong export of aluminum in terms of production cost advantages and technological advantages. It can be judged optimistically that in the second quarter, the export of aluminum products will maintain a growth trend and maintain a high growth rate.
Henan Yuguang Gold and Lead Group Co., Ltd.: At present, non-ferrous metal prices remain high, but at the same time, domestic zinc concentrate processing fees are sluggish, domestic and foreign zinc concentrate prices have fallen sharply, energy prices and logistics costs have risen rapidly, and corporate costs High, and the zinc smelting process has already suffered losses. In this case, can the loss of zinc smelting be reversed this year? What does the association think about this?
Jia Mingxing: At present, from the perspective of lead and zinc smelting itself, I think it can basically maintain a small profit. At the same time, the price of sulfuric acid has risen this year, and the prices of precious metals such as gold and silver have also risen, making the overall performance of the by-products of lead and zinc smelting good. At present, lead and zinc smelting has not reached the point of loss, and I think most of them are still profitable. In addition, in terms of business operations, everyone must adjust their mentality. At present, the overall business situation of the non-ferrous industry is good, including lead and zinc. Therefore, as far as the development of the entire industry is concerned, it is necessary to continuously improve the innovation capability, management capability, and resource allocation capabilities of enterprises. As far as the zinc price is concerned, at present, the zinc price is around 27,000 yuan/ton, which is close to 30,000 yuan/ton. As far as the processing fee is concerned, it is currently low, but not very low. At the same time, the recovery of zinc is difficult, which makes the supply of zinc resources more and more problematic. At present, the price of zinc is not high, and it should be more reasonable. The price of zinc should rise again to reflect the value of zinc. Therefore, in the future, the price of zinc has an advantage.
Jinchuan Group: In the first quarter of 2022, an "epic" short squeeze event occurred in the nickel futures market, which also led to chaos in the on-site market raw material pricing and product settlement in the short term, and the "price discovery" function of the futures market failed. At present, the impact of this short squeeze event has not been eliminated, and nickel prices remain high and fluctuated. May I ask how the association views this event and any suggestions for the subsequent development trend of the nickel market.
Jia Xingxing: The "short-squeezing war" of nickel in March is a major event for the nickel industry and the entire nonferrous metal industry, and everyone is very concerned about it. It can be seen that now our country has the strength, and the enterprise also has the strength. Later, the incident was resolved relatively smoothly. As far as nickel is concerned, domestic demand for nickel is huge, but our resource guarantee is insufficient. However, it is also seen that the quality of nickel sulfide ore in Jinchuan is very high, which is very important to meet the needs of my country's national defense industry. At the same time, my country has done a very good job in developing laterite nickel ore, and now it has fully mastered the complete set of technology for smelting laterite nickel ore, which is of great benefit to stabilizing nickel prices. At present, laterite nickel accounts for a large proportion of the entire resource supply guarantee. At the same time, industry companies have also done a good job in overseas resource development. In the short term, domestic demand for nickel is still very strong, so nickel prices will remain high.
From the perspective of the overall situation of the industry, we hope that our enterprises should standardize their operations in the process of operation, especially in the futures operation, they should have a sense of risk, and use futures as a favorable tool to protect the operation of enterprises, and do not turn futures into speculation. means, and affect the overall production and operation of the enterprise. Therefore, the Nonferrous Metals Association is also studying related issues, including research on the futures system, and hopes that the nickel price will remain stable.