The current development situation and thoughts of China’s zinc industry

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China's zinc production has ranked first in the world for 11 consecutive years, and zinc consumption has ranked first in the world for 5 consecutive years. China's lead and zinc industry has attracted the attention of the international lead and zinc industry. Indeed, in the past 15 years, China's lead and zinc industry has made remarkable achievements in the development of the world. China has become the world's largest zinc producer and consumer, playing an increasingly important role in the international zinc supply and demand system. From 1990 to 2000, it was a period of rapid development of China's zinc production. China's zinc production increased at a rate of 18%, and zinc consumption increased by 13.8%. During this period, the increase in output was greater than the increase in consumption. ； In the five years from 2000 to 2004, China's zinc production increased by 7.7%, while zinc consumption increased by 18.3%. Therefore, since 2000, China has entered a period in which the growth rate of consumption is greater than the growth rate of output. In China, zinc production and consumption have a very high correlation with gross national product. Before 2000, the linear correlation coefficient of zinc production reached 0.98. After 2000, with the acceleration of China's industrialization process and the adjustment of industrial structure, the linear correlation coefficient of zinc production reached more than 1. Therefore, the rapid development of China's zinc industry is driven by China's growing domestic demand for zinc. 2. Review of the development of China's zinc industry in 2004. In 2004, the global economy began to show strong growth, and the world's zinc market showed a rare good momentum in history. China 2004 * * A series of macro-control policies have been adopted. For China’s zinc industry, I think the main influencing factors are: First, the tightening of credit scale has caused delays in projects under construction for some enterprises and tight liquidity. ； Second, electricity prices and transportation prices have increased. ； Third, the zinc export tax rebate was reduced from 15% to 11%. However, as the main downstream industry that consumes zinc, it still belongs to * * Encourage the development of industries. The increase in consumption is greater than the increase in production, which has caused changes in the supply and demand relationship of zinc. The rise in prices has digested some unfavorable factors, causing China's zinc production to reach the largest increase in recent years. The operating conditions of industry enterprises have improved, especially mining enterprises, which have reached a historically good period. According to a report from the Statistics and Information Department of the China Nonferrous Metals Industry Association, 2.52 million tons of zinc were produced in 2004, an increase of more than 9% compared with 2003. Characteristics of changes in 2004: 1. Existing production companies are recovering and increasing production, but the transfer of smelting capacity to raw material production areas continues to accelerate, and competition for raw materials among domestic companies has intensified. China Nonferrous Metals Industry Association Statistical Express, 2004 China * * A series of macro-control policies including the contraction of credit scale have been adopted. Coupled with the shortage of electricity and transportation, some enterprises in Sichuan, Yunnan, Guangxi and other regions have reduced production. The main areas to increase production are Liaoning, Hunan, Gansu, Inner Mongolia, Shaanxi, Guizhou, etc. Among the major companies to increase production, Huludao Zinc Plant, Baiyin Nonferrous Metals Company and Hunan Sanli Company have resumed production capacity that was suspended before 2003. Other increases in output are mainly concentrated in the new production capacity of some companies in Inner Mongolia, Shaanxi, and Qinghai. However, judging from actual output, most smelters are not operating at full capacity. Antaike estimates that the country's zinc smelting capacity reached about 3 million tons by the end of 2004, with a capacity utilization rate of about 87%. What stands out is the increase in smelting output in some regions * * Higher than the increase in mine output. in: Mine output in Inner Mongolia increased by 48% over the previous year, and smelting output increased by 78%; Shaanxi mine output increased by 14%, and smelting output increased by 32%; Qinghai mine output increased by 48% over the previous year, and smelting output increased by 78%. 2. The increase in actual mine output is greater than the increase in smelting output, but lower than the increase in market consumption. In 2001, affected by the Nandan incident in Guangxi, China's mining output experienced negative growth for two consecutive years. Since 2003, driven by the domestic zinc market, the price of mining raw materials has continued to rise, stimulating the growth of mine output. New mines have been put into production in Yunnan, Inner Mongolia, Jiangxi, Hebei and other places. Due to China's large population, lead and zinc mineral resources are mainly distributed in relatively poor areas. In addition, the entry threshold for mining is too low, and there are a large number of small-scale mining mines, making complete industry statistics very difficult. However, based on the smelting output in recent years, China's mine output has resumed growth after 2003. The output in 2004 is estimated to reach 2.36 million tons, an increase of 13% from 2003. 3. Consumption growth is accelerating. Currently, the final consumption of zinc in China is mainly concentrated in construction, communications, electric power, transportation, agriculture, light industry, home appliances, automobiles and other industries. Therefore, galvanized steel, die-cast zinc alloy, brass, zinc oxide and batteries are all downstream products of the zinc industry. according to * * According to information from the Bureau of Statistics, in 2004, among the final consumer industries of zinc, the demand for home appliances, automobiles, and construction industries slowed down compared to 2003. However, demand for electricity, communications, agriculture, and transportation is growing faster. Driven by the demand of these industries, galvanized steel has the fastest growth, followed by the die-casting industry. According to relevant articles in China Metallurgical News, by the end of 2004, my country's galvanized sheet production capacity reached 16.75 million tons, and color-coated sheet production capacity reached 16 million tons. The demand for color-coated sheets and galvanized pipes in housing construction is very strong. The consumption of galvanized iron towers and galvanized pipes in power, communications, highways and agriculture is growing rapidly with the rapid development of these industries. In 2004, zinc consumption in the galvanizing industry alone is estimated to have increased by about 28% compared with 2003. The electricity, decoration, and decoration industries have promoted the consumption of brass, and the consumption of zinc for batteries and oxides, die-cast zinc alloys, etc. has increased to varying degrees. Therefore, China's zinc market showed unprecedented prosperity in 2004, making the apparent consumption of zinc reach 2.73 million tons. Zinc consumption increased by 27%. 4. China has become a net importer of zinc again. Before the early 1990s, China had always relied on imported zinc to meet domestic demand, and it was also an exporter of some zinc concentrates. After China's zinc exports exceeded imports for the first time in 1992, China's zinc industry continued for more than 10 years and appeared in the world's zinc supply and demand system as a net exporter (during this period, China's zinc concentrate changed from a net export to a net import in 2001). In 2004, the net import volume of the zinc industry reached US$440 million, with a net import of 15,500 tons of refined zinc, a net import of 180,900 tons of alloys, a net physical import of 616,100 tons of zinc concentrate, a net import of 54,700 tons of zinc materials, a net import of 75,400 tons of scrap, and a net export of 46,500 tons of zinc oxide. It has become a net importer of zinc again, which will have an impact on the development and demand pattern of the world zinc industry. 5. Production scale of enterprises in 2004. In 2004, there were still 10 enterprises in China with a zinc smelting output of more than 50,000 tons. The proportion of these enterprises in the country's zinc production increased from 47.7% in 2003 to 50%. It mainly relies on the resumption of production of Baiyin Northwest Lead-Zinc Smelter and Huludao and the increase in production of Zhuzhou Smelter. 2. Development of China's zinc industry in 2005 1. Production situation from January to March Under the high level of international basic metals, China's zinc production from January to March 2005 was 596,500 tons, an increase of 2.07% over the same period of the previous year. The output of mine statistics was 346,200 tons, an increase of 1.05%. During the same period, the zinc trade deficit reached US$170 million, an increase of 36.2%. ； The imported zinc concentrate was 187,900 tons, a year-on-year increase of 13%, the net import of refined zinc was 82,000 tons, a year-on-year increase of 89%, the import volume of zinc alloy was 42,000 tons, and the export volume was 6,200 tons, both down 63.3% and 19.5% compared with the same period last year. In terms of production, mainly due to the impact of transportation and electricity from January to February, major enterprises in Hunan and Guangxi have reduced production or arranged maintenance. At present, major enterprises in Hunan have gradually increased production. With the arrival of the peak demand season, the increase in zinc production will be greater than that from January to March. From May 1, China * * Lowering the export tax rebate for zinc to 8% will continue to reduce zinc exports, which can play a role in easing the domestic supply and demand situation. In addition to the impact of tight electricity, transportation capacity, and raw materials for some companies, China's macro-environment has no obvious negative impact on zinc. Looking at the overall trend throughout the year, it is estimated that the growth rate of output will reach 9%. 2. The structural adjustment of China's steel industry will continue to drive domestic zinc consumption demand. The development of the galvanized sheet industry is one of the focuses of the current structural adjustment of the steel industry. All major domestic steel companies are building production capacity for galvanized sheets for automobiles, home appliances and construction. At the Lead and Zinc Annual Conference in Chengdu in November 2004, relevant experts believed that my country had a total of 142 galvanizing production lines for steel companies in 2005, of which 46 were added that year, which would form a production capacity of 31.68 million tons. At present, due to the slow increase in cold-rolled sheet production capacity, some galvanizing lines may be idle, but the domestic galvanizing line production capacity exceeds 20 million tons. Coupled with the increasing demand for copper pipes, die-cast zinc alloys, batteries and other products in industries such as power, communications, agriculture, transportation, and light industry, domestic zinc consumption will continue to grow. It is predicted that China's zinc consumption growth rate will remain above 15% in 2005. 3. New smelting capacity continues to be transferred to raw material production areas. Due to various reasons, China's lead and zinc industry is still a group structure dominated by a single industry. It is a group of multiple independent mining companies and independent smelting companies. The changes in industry profits are obvious. When the supply of raw materials is greater than the demand of smelting companies, the smelting plants are the main body of the profit increase. On the contrary, the mines are the main body of the profit increase. With the continuous expansion of domestic smelting capacity and the continued tight supply of raw materials, the price of zinc raw materials has remained high, and the transfer of profits to mines has become inevitable. At the same time, due to the increase in local raw material supply, and people are generally optimistic about the zinc price in 2005, China has entered a peak period of new construction and expansion of zinc smelting plants. New raw material production areas have shown a trend of expanding production and building new smelting plants. According to the incomplete information we have, another 800,000 tons of production capacity will be built in 2005. However, in terms of mining, in addition to the news of medium-sized mining companies expanding production in Yunnan and Inner Mongolia, it is estimated that there are other mines, mainly small mines, expanding production and construction activities. From what we know about the new production capacity, Yunnan accounts for 30%, Inner Mongolia accounts for 20%, and Gansu, Shaanxi, and Qinghai provinces account for about 20%. New smelting capacity continues to be transferred to raw material production areas. Due to the impact of tight electricity and transportation and rising raw material prices, the production costs of smelting companies have also risen sharply. Therefore, the transfer of smelting capabilities to resource-rich areas is an inevitable choice to reduce costs. 3. Thoughts on the development of China’s lead and zinc industry 1. The market has room for development. China is entering a period of industrialized development * * , the rapid economic development will stimulate the continued increase in the consumption of raw materials. Judging from the characteristics of China's zinc consumption industry from January to March, compared with 2004, investment in electricity and transportation continued to maintain strong growth, and the demand for galvanized sheets for home appliances and automobiles increased compared with the previous year. China's zinc prospects are bright. 2. The expansion of zinc smelting production capacity must be rational. In the market, if consumption exceeds production capacity, production capacity will expand. This is a matter of course. But what is terrible is the imbalance caused by blind investment. The reason for the imbalance may be information asymmetry. Judging from the situation of some companies, they only know that market demand is growing but do not know what others are doing. Therefore, one or several projects are feasible, but ten or even dozens of the same "feasible" projects combined are not "feasible". It will trigger disorderly competition in the industry, especially China's lead and zinc industry, which is a group of multiple independent mining companies and independent smelting companies. The final result is disorderly competition. China's zinc production must prevent disorderly competition. There will be no winner in disorderly competition. 3. The development of mines must be sustainable. 4. Chinese lead and zinc enterprises should unite to promote the development of the industry, change the growth mode, and extend the industrial chain between enterprises. * * Mining and smelting enterprises should be encouraged to reorganize each other to enhance the overall strength of the industry.