2017.01.22
After entering the year of 2016, the steady growth of Chinese economy made domestic main non-ferrous metal consumption continue to rise, significantly improving the market expectations, which shows that China is still an important force in driving the development of world economy. From the international aspect, "Brexit", Trump winning election, and other black swan events have caused international financial turmoil, and the money has begun to return to the physical market from the virtual market. It causes "flip" to the commodity market situation, and the price stops decreasing but rises.
With expectation of domestic and foreign nonferrous metals market trend, there are several basic judgements:
Firstly, the oversupply situation will not change obviously. In the past, China's demand continued to grow, which drove the global major nonferrous metals to continue expansion of production capacity. However, as China's economy gets into the "new normal state", demand growth is slowing, the contradiction of the excess supply of the world's leading nonferrous metal is highlighted. Although Indian nonferrous metal production and consumption has a significant growth in recent years, it is still far from becoming the new momentum for the industry development. As a result, the oversupply situation of world's major nonferrous metals will influence China and even the world over a longer period of time.
Secondly, the price of main nonferrous metals continues to fluctuate at low level. Since the price of main nonferrous metals in the market at home and abroad is only slightly higher than the average cost of production line, supported by cost factors, the space for the continuous sharp falling of the price of most of metals is not big. But "de-capacity" structural adjustment of the world nonferrous metals is slow, a large amount of inventory accumulated in the past needs to digest. Under the shadow of excess supply, the power of the rise of most metals’ price is still insufficient.
Thirdly, the international political pattern is unrest, and the uncertain factors influencing the market increase. The current world economy comes to a critical juncture, the influence of Britain Brexit is gradually released, the President of the United States Trump comes to be in power, France and Germany conduct election, South Korea starts impeachment of prime minister; all of these will bring a lot of uncertainty to the global politics and economy. The trade protectionism of developed countries is serious; populism and extreme nationalism develop; reversal trend of globalization is obvious; the external environment of China's import and export will be more severe. The dollar price change has a reverse relationship with the main nonferrous metal price change; the United States raises interest rate, which constitutes restriction to the metal price, and then will directly affect the nonferrous metal price in the international market in 2017.
Fourthly, the new kinetic energy is still not enough to form stable support strength. At present, China's nonferrous metals industry has some new luminescent spots, and some new kinetic energies have formed, but the new bright spots and new kinetic energy take up a very small proportion compared with the industry's overall scale. For example, aviation aluminum, power battery material and other high-end products develop rapidly, and lithium and other rare metals are in short supply, with good benefit, but the market scale of these products is limited. It is difficult to form a strong support for industry development. Since the endogenous power of industry development is not strong, once the nonferrous metal price continues to rebound, it is likely to trigger a capacity expansion. Combined with the international trade friction, energy price rebounding, bank risk factor expectation increasing, etc., all of these will influence the steady development of the industry.
Therefore, in 2017, the outlook for main nonferrous metals market at home and abroad is not optimistic. In 2017, it is expected that the non-ferrous metal industry production continues to develop slowly in stabilization, and the range of the added value for the nonferrous metals enterprises is expected to remain at 6% to 7% level; the production of ten kinds of nonferrous metal keeps small growth; it is difficult to have a good development for the industry’s national assets investment; the pressure of enterprise economic benefit rise is large.
Relevant policies and suggestions
The current excess supply of main nonferrous metal is a global problem. But it is also the favorable opportunity to deepen the adjustment of industrial structure and accelerate the reform of the supply. In In the future, if we want to do something, we should grasp the opportunity, with the revitalization of the real economy of nonferrous metals. For this, the following policies and suggestions are put forward.
To begin with, it shall reduce the corporate tax. It is suggested to clear up the electricity price attached; in addition to residential electricity regulation, it shall cancel the other additional as far as possible; the airport construction fee shall be gradually cancelled. It shall suspend the issuing of non-ferrous metal’s associated product resource tax; revise mineral resources law, and no longer study and make the measures for the rights and interests of gold mineral resources. It shall study and formulate effective measures for the mining enterprises’ VAT deduction or directly reduce the mine enterprises’ VAT rates.
Secondly, it shall reduce financing costs. Capital is the blood of enterprises, and has strong penetration and correlation. It shall form a multi-level, diversified and efficient financing channel. Single layer and single variety of capital market function is difficult to meet the need for private enterprises to become bigger and stronger. It can actively and prudently develop the corporate bond market, greatly develop investment fund market, and further standardize enterprise property rights transaction market to create a good financing environment and condition for enterprise. At the same time, we will steadily develop the futures market, speed up the financial tool innovation, and avoid risk, reduce financial cost, provide opportunity to realize the product value for nonferrous metals enterprises. According to the requirements of the central economic work conference on the revitalization of the real economy, it shall summarize and promote successful cases, actively promote market-oriented debts.
Finally, it shall build good market environment. Enterprise expect the government to pay more attention to demand orientation in the process of simplifying policy and delegating powers to lower levels, and the government shall take the satisfaction of the masses, enterprises, market to more reform the points that the masses are not satisfied most, firstly reform the points that enterprises reflect mostly, from the government "serving the table" into social "taking order", to improve the degree of decentralization, and overcome the choke point in the process of enterprises’ development.