Beruflich Dokumente
Kultur Dokumente
Processing
Sector
China
June 2015
Produced by:
-1-
Table of Contents
4. Subsector Revenues and Costs
5. Top Ten Non-ferrous Metals
6. Aluminum Highlights
7. Aluminum Production
8. Aluminum Forecast
9. Copper Highlights
10.Copper Production
11.Lead & Zinc
12.Other Major NF Metals Production
13.Precious Metals
I. Sector Overview
1.
2.
3.
4.
5.
6.
7.
8.
9.
Sector Highlights
Main Sector Indicators
Sector Revenues and Profits
Sector Costs Overview
Foreign Trade
Investments
Employment
Prices
Government Policy
1.
2.
3.
4.
Subsector Highlights
Subsector Indicators
Subsector Revenues and Output
Iron & Steel Production
Iron & Steel Imports and Exports
Subsector Forecast
V. Main Players
1.
2.
3.
4.
Subsector Indicators
Subsector Revenues and Output Value
Metal Products Output
Ferrous Metals Product Trade
-2-
M&A Deals
M&A Activity, 2013-2014
Baoshan Iron & Steel Co., Ltd.
Baoshan Iron & Steel Co., Ltd. (contd)
Table of Contents
5. Jiangxi Copper Company Limited
6. Jiangxi Copper Company Limited (contd)
7. Aluminum Corporation of China Limited
8. Aluminum Corporation of China Limited (contd)
9. Hebei Iron and Steel Co., Ltd
10.Hebei Iron and Steel Co., Ltd (contd)
11.Shanxi Taigang Stainless Steel Co.,Ltd
12.Shanxi Taigang Stainless Steel Co.,Ltd (contd)
VI.Regional Distribution
1. Regional Distribution
-3-
I. Sector Overview
-4-
Sector Highlights
Global position
China is the world's leader in both production and consumption of most major metals, including steel, aluminum, copper, lead and zinc, for each of
which it accounts for between a third and half of the world market. However the countrys shift from an investment-driven to a consumption-driven
economy has resulted in mounting pressure on the heavy industry, with the metal processing sector facing an increasing number of challenges.
Challenges
Besides the countrys shift away from investment as a main growth driver, the slowdown in global demand and falling product prices
coupled with rising labour costs have eaten into the industrys profitability, further aggravated by structural overcapacity and fierce
competition between market players.
Consolidation
Beijing has long been trying to push forward the process of sector consolidation through mergers and acquisitions in order to tackle the overcapacity problems and
achieve a better efficiency and competitive power of industry leaders. While such efforts have met much resistance in recent years, efforts by the central
government have proceeded with a renewed strength. Most recently, the government has announced plans for consolidating the rare earth metal industry into six
large conglomerates. China has also set a goal that the top 10 steel producers control 60% of the market by 2025.
Tight Credit
Enterprises in the sector have been facing tighter credit conditions over the last year following an alleged scam in the port of Qingdao which
resulted in claims for more than USD 1bn. As a result, leading banks have enforced stricter control, higher collateral requirements and more
stringent credit approval procedures. The new situation is expected to further push smaller players to merge with bigger companies.
Main players
In spite of the difficult times, the metal sector has retained a strong presence among China's Top 500 listed enterprises of Fortune China for 2014
with 59 companies among the biggest 500, a number unchanged from 2013 and up from 57 in 2012. This is a higher number of companies than
any other industry in the country, with the machine manufacturing and real estate industries sharing the second position in 2014 with 40 companies
each.
-5-
2011
2012
2013
2014
GDP, RMB bn
40,890
48,412
53,412
58,802
63,646
10,331
12,573
14,190
15,570
16,105
25.7%
26.6%
27.3%
27.4%
25.3%
7,944
9,093
10,570
11,589
12,295
541.7
605.7
770.9
883.1
959.3
4,980
5,845
6,744
7,392
7,731
352
441
519
520
563
8818.6
8440.5
9411.6
n/a
n/a
Number of enterprises
41,784
30,080
36,391
37,136
37,445
4,494
3,449
5,206
5,217
5,305
-6-
28.5%
12,000
15,570
12,573
14,000
16,105
14,190
30%
580
25%
21.7%
10,000
520
12.9%
6,000
10%
9.7%
4,000
2,000
3.4%
0
2010
2011
2012
Revenues, RMB bn
2013
60%
50%
40%
540
15%
8,000
70%
62.5%
560
20%
10,331
585.3
600
30%
530.2
514.2
513.4
14.0%
501.9
500
5%
480
0%
460
2014
-5.3%
0%
-10%
-20%
2010
Growth, % y/y
10%
2.5%
-9.4%
20%
2011
2012
Profit, RMB bn
2013
2014
Change, % y/y
Comments
The metal processing sector revenues have grown for a fifth year in a row in 2014, yet the growth rate has been slowing down for a forth
consecutive year. Oversupply woes, falling prices and rising costs have weighed on the sectors overall performance. Meanwhile aggregate
profits have grown for the first time since 2011 amid a trend of major companies spinning off their losing assets and expanding into other
businesses.
-7-
Other Costs
16,000
27.8%
14,249
2011
2012
2013
2014
44.3
43.1
53.4
56.7
60.4
118.2
131.4
160.2
174.6
191.1
Administration expenses,
RMB bn
307.2
344.4
382.2
371.0
375.6
112.1
150.1
191.5
189.2
216.0
Financial expenses:
interest expenses, RMB
bn
103.3
152.5
193.8
182.8
198.9
14,751
14,000
11,297
12,000
25%
12,859
10,000
2010
30%
21.8%
20%
9,278
8,000
15%
13.8%
6,000
10.8%
10%
4,000
5%
2,000
3.5%
0%
2010
2011
2012
2013
2014
Growth, % y/y
-8-
Foreign Trade
Exports, USD mn
Imports, USD mn
200,000
120,000
180,000
160,000
140,000
85,960
120,000
66,250
100,000
80,000
20,000
14,534
80,000
12,607
14,467
14,812
16,485
51,542
49,847
Metal
products
78,358
25,442
53,154
60,000
40,000
73,202
100,000
Metal
products
23,490
21,687
22,663
55,511
53,882
54,724
Non
ferrous
metals
60,000
Iron and
steel
20,000
49,171
56,230
55,075
40,000
Non
ferrous
metals
17,945
39,583
72,291
25,033
27,192
22,842
21,486
22,498
2010
2011
2012
2013
2014
Iron and
steel
0
2010
2011
2012
2013
2014
Comments
The growth of production is steadily outperforming that of consumption thus causing a persistent accumulation of surplus in the sector, in a
trend that will hardly be reversed in the short to medium term. Therefore, producers continue seeking new channels to access foreign markets
for their production. However, when trying to expand their market abroad, Chinese companies are often accused of dumping and suffer from
import tariffs, which constitutes a serious risk as far as future exports are concerned.
The weakening of Chinas currency over 2014 is partially responsible for the accelerated exports growth throughout that year.
Source: General Administration of Customs
Any redistribution of this information is strictly prohibited.
Copyright 2015 EMIS, all rights reserved.
-9-
Investments
Fixed Asset Investments, RMB mn
2,500,000
30%
27.5%
25%
2,000,000
21.4%
21.4%
20%
1,500,000
711,434
595,501
362,249
292,404
346,502
861,972
448,488
546,494
576,988
8.7%
505,548
506,049
478,939
10%
386,127
Ferrous metal
smelting & pressing
5%
386,048
0%
2010
15%
13.8%
504,515
1,000,000
500,000
etal products
2011
2012
2013
2014
Comments
While investment growth has been slowing down over the last two years, it has stayed on the positive side in all three major segments of the
industry. Mills are scrapping their outdated equipment in compliance with Beijings environmental campaign, but the addition of new capacity
was put on hold, since metal giants often play a key role in local economies and regional governments often favour their development and
disregard what problems they cause.
In 2014, FAI growth has been unevenly distributed among the subsectors as metal products FAI have grown by 21.2% annually, non-ferrous
metals FAI by 5.6%, while that of the ferrous metals segment dropped by 5.4%.
Source: Statistics office
Any redistribution of this information is strictly prohibited.
Copyright 2015 EMIS, all rights reserved.
- 10 -
Employment
Manufacturing Industry Avg Annual Wage (RMB)
54,094
47,367
43,031
36,386
31,142
26,810
27,800
24,404
16,443
2008
17,260
2009
20,090
2010
41,650
36,665
30,916
24,138
2011
51,369
46,431
28,215
2012
32,035
2013
35,653
2014
State-owned companies
Private companies
Number of employees
90,207
48,101
41,220
38,857
37,487
33,520
32,635
32,291
31,738
26,672
Comments
Reduction of inefficient capacity across the industry is expected to bring about some major challenges to the labour market which is a serious
concern for local governments. Falling product prices and Beijings consolidation push are likely to further aggravate the employment situation
in the industry.
The total number of employees of the top ten listed employers in the sector fell to some 413 thousand in 2014 from 424 in the previous year,
or a drop of about 2.7%. Aluminum Corporation of China Ltd. had the largest scaling down of staff with employee numbers lower by about
7,800 than 2013.
Source: Statistics office, Fortune China
Any redistribution of this information is strictly prohibited.
Copyright 2015 EMIS, all rights reserved.
- 11 -
Prices
Metal Processing Industry PPI, PY = 100
120
110
100
90
80
2008
2009
Ferrous metal smelting & pressing
2010
2011
2012
Non ferrous metal smelting & pressing
2013
2014
Fabricated metal product
107.9
111.1
107.1
105.8
101.8
98.5
100.5
102.1
100.6
99.3
99.3
99.1
97.7
80
96.5
94.8
96.0
94.3
93.0
91.9
90.6
86.4
87.0
85.3
83.1
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014
Comments
Tightened liquidity, high stock levels and fierce competition have been pushing down prices in the sector, especially in the steel segment. Steel
prices have been falling almost incessantly since early 2013, reaching their lowest levels for the past twelve months in December 2014. Some
upward pressure has been seen in early 2015 from rising raw material costs but no sizable recovery is expected anytime in the near future.
- 12 -
Government Policy
Industry
Plans
China is preparing a series of development plans for the different subsectors of the industry in the near future. A new Iron
and Steel Industry Restructuring and Development Action Plan for 2015-2017 is expected in June 2015 which is mulled to
involve the scrapping of 80 million tonnes of outdated capacity to relieve oversupply, while the number of steel producing
companies is to be brought down from 500 to 300.
Another similar plan, for the non-ferrous metal industry development for the 2016-2020 period is also expected to be
released soon, but no details have been disclosed yet.
In May 2015, a plan for the rare earth metals industry was approved which aimed at consolidating the segment into 6 large
state-owned enterprises before the end of 2016, down from the current approximately 100 companies.
Going Global
The Going Global initiative which the Chinese government has been implementing since the turn of the century is headed
towards its next stage as Beijing would like to boost local companies presence in overseas markets. Steps in this direction
include the Silk Road Economic Belt and the 21st Century Maritime Silk Road, aiming to revive the ancient trading routes,
connecting Asia and Europe. These initiatives involve the construction of large-scale infrastructure projects, mostly ports
and railway facilities, with Chinese companies playing the main role in the construction process. The initiatives are
expected to open new markets for China's metal product manufacturers and help relieve the oversupply glut, experienced
by them at home.
Environment
In January 2015, a new environment protection law came into force. The law strengthened environmental legislation and
put a pressure on manufacturers in the metal processing industry to upgrade their facilities under the threat of severe
sanctions. Industry experts have estimated the cost of such upgrades at around RMB 160 per tonne of steel produced.
In March 2015, the industry ministry released a list of priorities for industrial conservation and integrated utilisation of
energies in 2015 with a special focus on industrial water conservation, a policy which is to have a major impact on metal
manufacturers in the country.
- 13 -
- 14 -
Subsector Highlights
Global Share
Between 2000 and 2014, China more than tripled its share of global steel output, becoming the biggest producer in
the world. The country accounted for 49.5% of total output in 2014, up from 15% at the turn of the century, although
marginally lower than the 2013 figure of 49.7%. According to OECD calculations, China is to contribute around 40%
of the global growth in the steelmaking industry in the period between 2012 and 2015.
Policy Shift
For years, China had been producing steel at levels far exceeding demand, thus creating a supply glut. Companies
were forced to export at lower prices, thus doing harm to the global competitors and reducing profitability in the
sector. Current excess capacity is estimated at around 300 million tonnes. However, in line with the current
governments course towards slower, more sustainable rates of development and bigger concern for the
environment, Beijing has started to shift away from its former policy of supporting high steel production, often by
means of generous subsidies for steelmakers. The government has recently given signals that it was aware of the
unsustainability of the current situation and was planning to reduce excess capacity while implementing more
strenuous regulations.
Going Out
While producing a significant share of global steel, the local industry has so far not been too successful in
establishing a stronger presence abroad. This, however, is probably going to start gradually changing in the near
future as a number of local companies has already begun building steel projects in countries like South Africa, Chile,
Indonesia and Thailand, among others. Projects, related to the One Belt One Road initiative are likely to support
steel exports over the next few years. At the same time, Chinese regulators are rumoured to be preparing an
amendment which would allow foreign investments in the local steel industry.
- 15 -
Subsector Indicators
Chinas Ferrous Metal Processing Subsector in Figures
2010
2011
2012
2013
2014
5,449
6,591
7,156
7,632
7,503
4,598
5,203
5,818
6,264
6,487
176.59
205.46
258.13
298.75
323.11
3,019
3,512
3,912
4,225
4,282
179.23
227.05
257.49
267.4
282.66
3.46
3.4
4.04
n/a
n/a
Number of enterprises
7,881
6,742
10,880
11,034
10,564
1,155
1,131
2,064
1,946
1,921
Number of employees, mn
- 16 -
9000
8000
7000
6000
5000
30%
24.1%
6,591
21.0%
6,029
5,449
4,982
7,632
7,069
7,156
6,599
7,503
6,945
6.6%
224
215
170
170
-1.7%165
0
2011
2012
2013
3,020
3,065
40%
2,922
0%
1,000
-5%
500
10%
1.5%
0%
-4.7%
-7.5%
-10%
-11.7%
-20%
2009
2010
2011
GIO, RMB bn
2012
2013
2014
Annual change
Comments
The 1.7% drop in revenues in 2014 was the first one since 2009 and only the second one since the beginning of the century.
Industrial output has suffered from oversupply in the recent years and has flattened out, with industry watchers expecting the trend to
continue for at least a few more years.
- 17 -
30%
20%
17.8%
1,500
2014
Revenues, RMB bn
2,069
2,000
5%
2000
2010
2,500
10%
8.6%
3000
3,263
2,770
33.9%
3,000
20%
15%
4000
1000
3,500
25%
Product
Iron ore
Pig iron
2010
2011
2012
2013
181,318
2014
595,601
645,429
670,102
748,084
711,599
58,358
Ferroalloy
24,355
28,005
31,567
36,122
37,860
Crude steel
638,743
701,968
731,040
822,000
822,698
46,820
2010
Source: China Iron and Steel Association, Statistics office
Any redistribution of this information is strictly prohibited.
Copyright 2015 EMIS, all rights reserved.
- 18 -
2011
50,088
49,140
2012
2013 (Jan-Nov)
2014
2009
2010
2011
2012
2013
Coke
544
3,346
3,298
1,020
4,673
5.3
212.7
151
111.7
224
Ferroalloy
925
1,137
935
637
482
Pig iron
237
707
872
302
265
Scrap steel
9.1
372.8
25.1
0.9
0.3
Steel billet
43
142
4.9
4.2
4.0
Steel ingot
0.4
0.9
0.1
0.1
0.3
2009
2010
2011
2012
2013
Coke
159
110
116
76
35
1,773
1,379
1,381
1,062
606
Ferroalloy
2,566
2,030
2,054
1,894
2,128
Iron ore
627,779
618,645
686,058
743,553
819,414
Pig iron
3,617
873
971
581
298
Scrap steel
13,691
5,848
6,767
4,974
4,465
Steel billet
4,585
637
636
361
552
Steel ingot
65
41
30
41
59
- 19 -
Subsector Forecast
Market Size
800
14.0%
700
12.0%
11.7%
600
10.0%
9.6%
500
7.5%
400
6.0%
300
4.0%
200
100
8.0%
2.2%
1.9%
2.0%
0.0%
2014
2015
2016
Steel market value, USD bn
2017
2018
Annual change
Comments
Despite of the poor recent performance, a number of factors are to positively influence the industrys development, including the ongoing
urbanisation and the rising demand for machinery, appliances and automobiles, as well as a significant number of infrastructure projects which
the government has already initiated. Environmental regulations and overcapacity woes are to continue weighing on growth rates in the short
to medium term.
According to industry giant Baosteel, China's total crude steel capacity will reach 1.19 billion mt/year by end-2015, rising by 2.5% annually,
with capacity utilisation at about 71%.
Source: Marketline
Any redistribution of this information is strictly prohibited.
Copyright 2015 EMIS, all rights reserved.
- 20 -
- 21 -
Subsector Highlights
Development
Not unlike the ferrous sector, nonferrous metal manufacturers have suffered from slower demand as the macro
economy has aligned with the new normal development course set by the government, growing at slower rates
than the ones experienced in previous decades and real estate, infrastructure and manufacturing capacity have
stalled. The industry has received some government support by means of increased subsidies, but is still looking for
more sustainable mid- to long-term drivers.
Prices
Prices of nonferrous metals have stayed at low historical levels due to the subdued global demand and the
oversupply from Chinese producers. In 2014, spot prices of copper, aluminum and lead lost respectively 6.8%,
5.2%, 3.9% and 0.5% respectively, while zinc gained 12.8% vs. 2013.
M&A
Amid the ongoing consolidation trend, merger and acquisition deals have become increasingly frequent in the
subsector. According to Xinhua news agency, for the first three quarters of 2014, 32 out of the 93 listed nonferous
companies have resorted to M&A, either by direct participation or by taking part in different funds for this purpose.
Opening Up
The National Development and Reform Commission introduced new regulations in April 2015 which removed the
restrictions on foreign investments in copper, aluminum, lead and zinc smelting. However, restrictions on the
smelting of tungsten, molybdenum, tin, antimony and rare earths are still in place, while mining of tungsten,
molybdenum, tin, antimony and rare earths is altogether forbidden for foreign investors.
- 22 -
Subsector Indicators
Chinas Nonferrous Metal Processing Subsector in Figures
2010
2011
2012
2013
2014
2,918
3,687
4,127
4,654
5,075
2,030
2,371
2,811
3,186
3,526
142
164
203
235
267
1,236
1,476
1,769
2,024
2,256
96
129
154
139
154
Number of employees, mn
1,916
1,926
1,908
n/a
n/a
Number of enterprises
8,200
6,765
6,954
7,168
7,236
934
885
1,216
1,281
1,294
- 23 -
Cost of Sales
6000
45%
5000
40%
4500
35%
4000
4,725
40%
37.7%
5000
5,075
38.9%
4,654
4,127
4000
26.4%
3000
20%
2000
15%
14.0%
12.8%
9.1%
25%
2500
20%
1000
3,298
26.2%
2,613
2,918
11.9%
30%
3000
25%
2000
35%
3,761
3500
30%
3,687
4,329
15%
15.1%
1500
10%
9.1%
1000
5%
207
176
162
2010
145
5%
500
149
10%
0%
2011
2012
Revenues, RMB bn
2013
2014
Profit, RMB bn
2011
2012
0%
2010
- 24 -
2013
2014
Annual change
25,507
23,383
26,044
23,518
2008
2009
31,360
28,191
34,389
31,001
2010
2011
36,970
33,580
40,288
36,798
2012
44,170
40,500
2013
Comments
The ten major non-ferrous metals include aluminum, copper, lead, zinc, nickel, tin, antimony, mercury, magnesium and titanium.
- 25 -
2014
Aluminum Highlights
Development
The country is the global leader in both production and consumption as it currently produces about half of the total
global primary aluminum output. China accounted for 119 out of the 133 aluminum smelters built in the world
between 1985 and 2005. However, the segment has been one of the worst performers in the economy in the recent
quarters.
Capacity
Chinese companies have been particularly active in adding new capacitiy since the middle of 2014. According to the
Antaike network, total capacity is to reach 40 million tonnes in 2015, up from 35.64 million for 2014, the latter of
which represented an annual growth of 12.7%.
Expansion
About half of newly added capacity in 2014, or some 2 mn tonnes output, was built in the Xinjiang region, which
made it the fastest growing region in the country. In 2015, a smaller figure of 0.5 million tonnes of new capacity is to
be completed there.
- 26 -
Aluminum Production
Aluminum Production, thou tonnes
Aluminum Trade
11,255
15,000
13,613
8,573
16,244
11,895
20%
9,183
9,734
18,135
20,000
10,127
22,046
20,251
11,403
25%
12,657
24,382
12,296
11,916
26.0%
11,065
25,000
30%
13,189
30,000
15%
11.6%
11.7%
10.6%
8.9%
5,000
5,188
10,000
10%
5%
0%
2010
2011
2012
2013
2014
2008
Annual growth, %
2010
2011
2009
- 27 -
2012
2013
2014
Aluminum Forecast
Market Size
70,000
60,000
12.0%
10.6%
10.0%
9.7%
50,000
40,000
6.5%
7.3%
6.1%
8.0%
6.0%
30,000
4.0%
20,000
2.0%
10,000
0
0.0%
2014
2015
2016
Aluminum market value, USD mn
2017
2018
Annual change
Comments
No drastic change is expected in the segments overcapacity situation over the next few years as rising demand for automobiles and other
aluminum-related goods is unlikely to offset the increase in supply.
A CAGR of 7.5% is expected over the forecast period.
The shift towards the western part of the country is to intensify further yet as energy, which constitutes a large proportion of aluminum
production cost, is much more affordable in the less developed regions in that part of China.
Source: Marketline
Any redistribution of this information is strictly prohibited.
Copyright 2015 EMIS, all rights reserved.
- 28 -
Copper Highlights
Global Role
With a 43% share, China was the worlds leading consumer of refined copper in 2013. It was also the second largest
producer of mined copper for the same year with 10% of global total, only behind Chile with 31%.
Slower
investments
A total of 196 copper smelting facilities were under construction in China in 2014 with total investments equal to
RMB 23.2bn, down 3.6% from the previous year. Overall investments in the segment fell by 11.9% to RMB 46.3 bn.
Perspectives
BMI Research expects copper output to grow by an average rate of 2.5% annually until 2019, reaching a level of
1.84 mn tonnes. That would be comparable to an annual growth of 8.4% over the last decade. Low product prices
are expected to result in a number of closures of low-level producers, but a weaker RMB versus the USD is likely to
bring down production costs for Chinese players.
- 29 -
Copper Production
Refined Copper Production
Copper Trade
9,000
18%
16.3%
8,000
7,000
13.7%
6,000
12.1%
5,000
4,540
5,163
13.9%
7,959
16.4%
6,839
68,660
68,332
57,640
12%
10%
4,000
8%
3,000
6%
2,000
4%
1,000
2%
35,720
2010
2011
2012
2013
2014
Annual growth, %
2009
6,127
2008
6,451
2014
6,515
2013
6,024
2012
4,194
0%
2011
37,191
3,168
5,033
0
2010
68,828
16%
14%
5,879
70,339
- 30 -
5,000
4,158
10.2%
4,000
4,591
Zinc Production
4,475
15%
4,221
10.7%
6,000
5,800
5,600
5,400
5,200
5,000
4,800
4,600
4,400
10%
3,000
5%
2,000
-0.3%
0%
-2.5%
1,000
-5%
-5.7%
-10%
2010
2011
2012
2013
5,212
5,209
2014
2010
2011
2008
2009
211
2010
56
2011
2014
Annual growth, %
2012
151
2013
3,344
3,347
2,727
2,236
3,028
3,142
2,053
278
156
2008
2014
131
2009
217
179
2010
2011
2012
3,284
2,182
169
2013
-6.4%
3,273
2,043
120
9.9%
Zinc Trade
2,510
290
8.6%
4,881
Lead Trade
1,774
5,302
0.1%
Annual growth, %
3,178
25%
20%
15%
10%
5%
0%
-5%
-10%
5,827
21.5%
- 31 -
104
2012
96
2013
423
2014
874
770
698
675
651
354
312
242
193
200
159 149
175
2010
2011
106
82
2012
Antimony
187
159
148
Magnesium
263
197
156
68
57
279
2013
Nickel
Tin
Titanium
101
2014
Precious Metals
Gold Production & Consumption
Silver Production
1400
1,176
1200
11.7%
1000
800
8.6%
600
400
516
341
5.9%
361
886
832
761
14%
4400
12%
4200
10%
4000
8%
403
6.2%
428
430
6%
3600
0.4%
2010
2011
2012
2013
3,700
3,500
3400
2%
3,900
3800
4%
200
4,200
4,100
3200
0%
2014
3000
2010
2011
2012
2013
2014
Comments
China is the world leader in gold production, accounting for some 16% of global total output followed by Australia, Russia and the U.S.
The country is the worlds second largest silver producer in the world, only behind Mexico which produced 5,400 tonnes in 2013.
Exports of precious metals and precious metals jewelry have been growing at a staggering rate, from USD 1.8mn in 2004 to USD10 mn in
2011 and then 48.5 mn in 2014. In 2014 alone, exports have increased by as much as 67.9%.
- 33 -
- 34 -
Subsector Indicators
Chinas Metal Product Manufacturing Subsector in Figures
2010
2011
2012
2013
2014
1,964
2,295
2,907
3,284
3,527
1,316
1,519
1,941
2,139
2,282
223.26
236.66
309.61
349.25
369.09
724.96
857.73
1062.1
1,143
1,194
77
85
107
114
126
Number of employees, mn
3446.4
3115.1
3467.4
n/a
n/a
Number of enterprises
25,703
16,573
18,557
18,934
19,645
2,405
1,433
1,926
1,990
2,090
- 35 -
4000
3500
3500
30.0%
26.7%
3,527
26.7%
3,284
3000
25.0%
26.0%
2,852
20%
2,295
16.8%
1,971
17.1%
2000
1,964
25%
2,500
2500
20.0%
2500
3,081
26.8%
2,907
3000
2000
30%
15.0%
1,684
15%
14.1%
13.0%
1500
1500
10.0%
1000
10%
1000
7.4%
8.1%
5.0%
500
155
184
188
201
136
2010
5%
500
0.0%
2011
2012
Revenues, RMB bn
2013
2014
Profit, RMB bn
2011
2012
0%
2010
- 36 -
2013
2014
Annual change
Product
2010
2011
2012
2013
2014
Product
2010
2011
2012
2013
2014
Railway use
5,503
4,410
5,154
6,080
5,654
Steel wire
2,016
3,634
5,305
n/a
n/a
Rod
68,926
69,401
74,102
78,200
79,418
Bar
130,964
154,056
175,377
206,192
215,277
2,779
3,121
3,727
n/a
n/
Wire rod
105,528
122,591
136,161
150,893
153,832
Steel strand
2,460
2,862
3,690
3,973
6,047
4,817
6,179
5,370
6,637
7,270
4.4
5.6
6.8
7.4
9.6
Heavy plate
22,236
26,036
23,410
23,988
26,385
73,608
90,560
94,965
102,725
130,145
Medium plate
42,417
41,237
38,028
38,124
40,009
Others
14,595
17,924
18,983
23,585
35,290
6,197
9,670
7,924
7,309
8,158
22,442
25,923
25,618
30,317
37,100
Product
2010
2011
2012
2013
2014
102,892
105,038
108,662
119,882
123,008
Copper product
9,851
10,373
11,014
14,987
17,837
37,609
42,432
50,313
55,516
52,968
29,336
32,534
36,388
39,502
42,596
Aluminium product
19,906
23,519
25,941
39,624
48,458
45,212
46,883
50,932
59,319
59,592
Lead product
9.7
10.1
9.7
n/a
n/a
8,245
9,653
9,189
10,251
12,487
Zinc product
16.8
14.7
14
n/a
n/a
28,466
31,566
37,579
43,378
50,749
Nickel product
6.314
4.542
4.853
n/a
n/a
5,538
5,833
7,779
7,590
8,252
Tin product
38.578
39.719
39.241
n/a
n/a
5,717
6,197
6,588
8,385
8,852
Magnesium product
0.059
0.087
0.112
n/a
n/a
25,281
26,490
28,197
29,628
31,369
1,812
2,116
2,305
n/a
n/a
32,370
40,487
47,754
50,162
57,611
906.8
1,278
1,192
n/a
n/a
Source: China Iron and Steel Association, China Nonferrous Metals Industry Association, Statistics office
Any redistribution of this information is strictly prohibited.
Copyright 2015 EMIS, all rights reserved.
- 37 -
2010
2011
2012
2013
2014
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
16,429
42,558
15,586
48,904
13,660
55,793
14,077
62,336
14432
93784
419
5,187
337
6,690
324
11,783
387
4104.8
380.84
4598.8
1,129
1,927
1,148
2,569
895
3,357
1,027
17,106
1203.2
30863
13,921
24,812
13,202
26,586
11,666
26,984
11,886
27,642
12081
43670
480
7,309
524
9,241
426
9,635
425
9,570
476.49
10058
189
439
92
533
116
540
111
378
46
593
Steel products
- 38 -
11,948
7,600
7,828
10,407
10,362
6,743
9,799
6,446
6,037
7,543
3,593
4,526
4,224
4,177
4,232
125
116
60
43
139
37
33
30
150
95
57
35
74
126
74
37
2011
2012
2013
2014
3,872
110
87
33
32
2010
Copper products
Aluminium products
Lead products
Zinc products
Tin products
Nickel products
3,126
- 39 -
3,390
3,026
3,018
496
2
197
89
577
239
77
6
605
240
61
6
533
211
55
7
481
53
211
3
2010
2011
2012
2013
2014
Copper products
Aluminium products
Lead products
Zinc products
Tin products
Nickel products
V. Main Players
- 40 -
M&A Deals
Top 15 M&A15 Deals in Chinas Metal Processing Sector (Jan 2014-May 2015)
Date
3.1.2014
Target Company
Minmetals Development Co Ltd
3.4.2014
15.5.2015
Deal Type
Buyer
Minority stake
China Minmetals Corp
purchase
Acquisition OC Oerlikon Corporation AG
Minority stake
Institutional investors
purchase
Li Feiwen - private investor; Liu Zhenguang - private investor; Huang Lihou - private investor; Li
Acquisition Qiang - private investor; Wang Jiman - private investor; Zhu Zheng - private investor; Liu Benzhong private investor; Yan Weimin - private investor; Jin Jie - private investor
Seller
Source: DealWatch
- 41 -
100
Private
investor(s)
Jiangsu
Shagang
Group Co Ltd
Shenzhen Mengshang Fund Management Co Ltd; Shenzhen Haizhimen Leisure Sports Development
Acquisition Co Ltd; Shenzhen Qianhai Furong Asset Management Co Ltd; Golden Eagle Asset Management Co
Ltd; Xu Xizhong - private investor; Chen Gengfa - private investor
Nanjing Gaoke Co Ltd; Fujian Investment and Development Group Co Ltd; Fujian Rare Earth (Group)
Minority stake
Co Ltd; Shanghai Rationalize Investment LP; Golden Circle Capital Management (Xiamen) Co Ltd;
purchase
Haoxi Equity Investment Management (Shanghai) Co Ltd; Ke Xiping - private investor
10.10.2014
30
(Market
estimate)
60
25
42
2013
Total value of deals (USD mn)
3,177
Q1
18
2,765
Q4
25
21
1,740
Q3
27
4,435
Q2
50.1-100mn;
15.5%
33
7,724
4,051
Q1
32
4,127
5,750
34
Q2
Q3
Q4
0-50mn;
53.4%
500.1-1000;
2.6%
> 1000mn;
2.6%
Undisclosed;
2.6%
2014
Number of Deals
Minority stake
purchase
30.2%
Block Trade
27.2%
Acquisition
36.6%
China 85.6%
EMEA 4.4%
Open market
purchase 2.6%
Asia 1.9%
SPO 1.3%
IPO 2.2%
Source: DealWatch
Any redistribution of this information is strictly prohibited.
Copyright 2015 EMIS, all rights reserved.
Hong Kong
5.6%
- 42 -
Highlights
220,872
191,135
2012
Revenues, RMB mn
EBT, RMB mn
5,792
8,278
2011
187,414
5,818
8,010
10,090
12,664
7,362
9,260
12,889
17,076
2010
189,688
2013
2014
2011
2012
2013
2014
216,065
242,122
220,912
226,704
228,653
111,319
117,630
97,016
106,747
104,448
104,746
113,470
117,342
119,957
124,205
18,856
12,242
22,202
12,090
28,280
Cost of sales
177,817
203,041
176,879
171,718
168,931
0.74
0.40
0.58
0.35
0.35
- 43 -
Sales expenses
2013
2014
Change y/y
1,963
2,200
+12.09%
120,000
100,000
Administrative expenses
6,881
7,728
+12.32%
Financial expenses
-544
488
n/a
R&D expenses
3,430
3,931
+14.61%
Other iron
and steel
products
7,111
4,849
9,830
4,893
80,000
31,320
9,116
4,971
Steel tubes
and pipes
28,816
Heavy plates
60,000
Hot-rolled
carbon steel
sheets and
coils
40,000
50,883
20,000
China 89.9%
Resf of the
World 10.1%
Cold-rolled
carbon steel
sheets and
coils
0
2013
51,369
- 44 -
2014
158,556
Highlights
175,890
198,833
117,641
76,441
Revenues, RMB mn
2012
2,851
5,721
2011
3,565
6,532
5,216
7,435
6,549
9,771
4,907
8,047
2010
2013
2014
2010
2011
2012
2013
2014
68,161
106,981
150,609
168,423
192,225
2,300
2,989
1,672
2,687
2,745
54,845
68,150
78,133
88,767
95,322
20,722
28,847
35,314
44,244
49,588
34,123
39,303
42,820
44,523
45,734
1.56
1.89
1.51
1.03
0.82
- 45 -
Copper
cathodes
59.3%
Expenses, RMB mn
Copper
processing
products 2.6%
5,000
Gold 3.7%
Silver 1.3%
Chemical
products 0.7%
Rare metals
and other nonferrous metals
7.9%
Others 1.2%
4,000
2,328
2,326
3,000
157
2,000
1,703
1,846
Administra
tive
expenses
547
Sales and
distribution
expenses
1,000
Mainland
China 87.6%
545
Hong Kong
4.9%
-6
2013
Others 7.5%
-1,000
Expenses
on
research
and
developme
nt
Financial
expenses
- 46 -
2014
143,437
138,206
-17,049
634
2013
141,772
751
2,751
2012
-8,644
11
691
7,370
2011
Highlights
2014
2010
2011
2012
2013
2014
105,648
130,836
143,426
166,680
141,139
6,250
7,165
8,830
10,233
12,549
141,322
157,134
175,017
199,507
192,632
84,135
98,979
121,246
145,805
153,003
51,581
51,826
43,808
44,358
28,276
0.06
0.02
-0.61
0.07
-1.2
- 47 -
Highlights
The output of alumina in 2014 amounted to 12.02 million
tonnes, representing an annual decrease of 1%, the
output of alumina chemicals amounted to 1.82 million
tonnes, representing an annual increase of 5.81%, and
the output of primary aluminum products amounted to
3.38 million tonnes.
In May 2015, the company's parent group announced plans
to set up two financial arms with a total capital of RMB
2.8bn to facilitate its financial business and help it deal with
the losses suffered in recent years.
Meanwhile, CHALCO has also started spinning off some of
its non-core assets in order to reduce losses. In December
it announced that it would be selling three fully-owned
companies as well as one 72%-owned and one 27%owned. The subsidiaries in question were engaged in
silicon metal, photovoltaic materials and polysilicon
production.
In August 2014 CHALCO was approved by the government
to integrate rare earth enterprises in the provinces of
Guangxi, Jiangsu, Shandong and Sichuan to its wholly
owned subsidiary China Rare-earth Corp. In early 2015 it
also formed a coalition with eleven other local smelters
aiming to boost local aluminium prices.
Recently, the Company was hit by a corruption scandal as
its general manager Sun Zhaoxue was charged with
soliciting and accepting bribes and was dismissed from his
senior position at the Communist Party of China. In another
major change in management, chairman Xiong Weiping
was replaced by former Chengdu mayor Ge Honglin.
250,000
200,000
0
332
150,000
117,295
789
5,159
Corporate
and other
operating
segments
Energy
segment
348
5,242
137,283
110,108
100,000
50,000
0
58,036
49,953
31,846
33,980
30,706
2012
2013
2014
40,423
Trading
segment
Expenses, in RMB mn
14,000
294
12,000
10,000
194
185
8,000
6,000
4,000
2,000
0
206
162
2,190
2,917
2,450
2,553
1,448
2010
4,061
5,670
5,233
4,832
2,750
2,947
1,488
1,834
1,859
1,753
2011
2012
2013
2014
Research and
development
expenses
Finance costs,
net
General and
administrative
expenses
Selling and
distribution
expenses
- 48 -
116,919
Highlights
133,344
111,630
Revenues, RMB mn
697
10,712
2011
2012
2013
98,257
116
9,371
109
9,224
1,383
10,799
1,411
8,349
2010
110,255
2014
2010
2011
2012
2013
2014
122,545
102,406
100,884
87,546
6,686
9,022
8,992
9,140
9,774
104,938
141,041
154,784
166,898
170,368
75,507
98,317
112,242
124,338
127,331
29,431
42,723
42,542
42,560
43,037
0.21
0.13
0.01
0.01
0.07
- 49 -
7,210
1,052
4,793
100,000
14,000
8,207
814
Vanadium
products
60,000
40,000
89,985
81,790
1,742
8,000
3,285
3,866
Operating
revenue,
RMB mn
(2014)
Share of
total
(2014)
Northern China
75,888
73.6%
69,167
72.8%
5,833
5.7%
5,473
5.8%
East China
18,869
18.3%
15,892
16.7%
Northeast China
410
0.4%
452.3
0.5%
Northwest China
430
0.4%
640
0.7%
Southwest China
355
0.3%
223
0.2%
1,255
1.2%
3,218
3.4%
Outside China
Product
Steel products
Chemical products
5,489
5,327
Sales and
distribution
expenses
598
649
2013
2014
Output (tonnes)
Operating revenue,
RMB mn (2013)
Region
Administrative
expenses
2,000
Steel
products
2014
1,777
4,000
20,000
2013
10,000
6,000
Billets
Expenses on
research and
development
Financial
expenses
12,000
Others
4,225
80,000
Expenses, in RMB mn
- 50 -
2013
2014
Annual
change
29,743,630
29,599,312
-0.5%
17,075
14,907
-12.7%
96,220
87,198
105,020
86,766
Revenues, RMB mn
Gross profit
442
6,757
2012
630
6,659
2011
1,106
7,686
1,805
8,244
1,372
7,741
2010
Highlights
2013
2014
2010
2011
2012
2013
2014
79,457
87,976
95,829
98,361
80,009
6,284
6,432
6,684
6,153
6,452
63,605
65,812
69,467
75,811
76,306
41,762
42,508
45,211
51,181
51,326
21,843
23,304
24,256
24,630
24,980
0.24
0.32
0.19
0.11
0.08
- 51 -
Expenses, in RMB mn
120,000
100,000
80,000
60,000
40,000
20,000
47,090
27,584
20,085
3,312
16,877
34,161
38,395
2,973
9,000
Plain carbon
steel billets
8,000
7,000
General steel
products
2014
2,294
Expenses on
research and
development
2,252
6,000
Stainless
steel
0
2013
Other
activities
5,000
1,112
Financial
expenses
871
Northern China
4,000
Share of
total
(2013)
Operating
revenue,
RMB mn
(2014)
Share of
total
(2014)
57,156
61.0%
45,241
52.5%
13,435
14.3%
8,353
9.7%
East China
8,353
8.9%
15,259
17.7%
Northeast China
3,498
3.7%
1,644
1.9%
Northwest China
1,810
1.9%
1,220
1.4%
Southwest China
1389
1.5%
1,258
1.5%
Outside China
8,046
8.6%
13,193
15.3%
Region
3,000
2,982
Administrative
expenses
2,000
1,000
1,425
1,707
2013
3,047
- 52 -
2014
Sales and
distribution
expenses
- 53 -
North China
Steel products output (2014):
379.6 tons mn (33.7% of total)
Zinc output (2014)
0.6 tons mn (9.5% of total)
Northeast China
Steel products output (2014):
88.4 tons mn (7.9% of total)
Zinc output (2014)
0.3 tons mn (4.5% of total)
East China
Steel products output (2014):
375.7 tons mn (33.4% of total)
Zinc output (2014)
1.1 tons mn (18.8% of total)
South Central China
Steel products output (2014):
168.6 tons mn (15% of total)
Southwest China
Steel products output (2014):
67.4 tons mn (6% of total)
- 54 -
Contact:
Corporate Headquarters
6-8 Bouverie Street
London EC4Y 8DD
UK
Voice: +44 20 7779 8100
Fax: +44 20 7779 8224
Americas Headquarters
225 Park Avenue South
New York, New York 10003
US
Voice: +1 212 610 2900
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EMIS Insight is a unit of EMIS that produces proprietary strategic research and analysis. The service features market overviews, industry trend analysis, legislation
and profiles of the leading sector companies provided by locally-based analysts.
About EMIS
Founded in 1994, EMIS (formerly known as ISI Emerging Markets) was acquired by Euromoney Institutional Investor PLC in 1999. EMIS works from over 15 offices
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