China's renewable non-ferrous metals industry is weak in competitiveness

**Abstract** Recently, the China Nonferrous Metals Industry Association's Recycling Metals Branch released a report on the performance of the recycled non-ferrous metals sector during the first three quarters of 2013. The report was presented by Wang Xiaoyang, deputy director of the Department of Energy Conservation and Comprehensive Utilization at the Ministry of Industry and Information Technology, as well as vice president of the China Nonferrous Metals Industry Association. Shang Fushan, president of the Recycling Metals Branch, Wang Jiwei, vice president and secretary general of the branch, and Li Shilong also provided insights during the briefing. In the 21st century, China’s renewable non-ferrous metal industry has experienced rapid growth. By 2012, the output of mainly recycled non-ferrous metals surpassed 10 million tons, becoming a key component of the national non-ferrous metals sector. However, this year has brought challenges due to a complex domestic and international economic environment. Despite these difficulties, with support from relevant government departments and under the guidance of local governments, the industry managed to maintain a relatively stable operational state. Wang Jiwei highlighted that while the industry remained largely stable in the first three quarters, many companies faced significant declines in profitability. Investment growth in smelting and processing projects slowed down, and trade volumes for imports and exports also declined. Additionally, prices of non-ferrous metals remained significantly lower than the same period last year, negatively impacting the entire sector. According to preliminary data, total output of recycled non-ferrous metals (copper, aluminum, lead, and zinc) in China during the first nine months of 2013 reached 7.22 million tons, representing a 5.1% drop compared to the previous year. Specifically, recycled copper output fell by 12.2%, reaching 1.8 million tons; recycled aluminum output dropped slightly by 3% to 3.5 million tons; recycled lead output increased by 4.8% to 1.1 million tons; and recycled zinc output declined by 8.9% to 820,000 tons. From January to August 2013, China imported a total of 4.394 million tons of copper, aluminum, and zinc-containing waste materials, valued at $11.41 billion. Copper-containing scrap imports dropped by 9% to 2.79 million tons, while aluminum-containing scrap imports decreased by 7.6% to 1.58 million tons. Zinc scrap imports saw a small increase of 9.1% to 24,000 tons. Throughout the first three quarters, copper prices continued to decline, falling from 60,270 yuan per ton at the start of the year to 52,700 yuan per ton by the end of September—a decrease of 12.6%. The average price of 1# scrap copper was 49,460 yuan per ton, while 2# scrap copper averaged 45,800 yuan per ton. Scrap aluminum prices dropped by 8% year-on-year, averaging 12,509 yuan per ton, while recycled aluminum alloy ADC12 averaged 15,755 yuan per ton. Waste lead-acid battery prices remained stable at around 7,700 yuan per ton throughout the period. Fixed asset investment in the recycled non-ferrous metals industry also slowed significantly in the first three quarters. This was primarily due to a slowdown in the development of recycling parks, reduced numbers of enterprises entering these facilities, and weaker profitability among park-based businesses. Additionally, the number of new production enterprises decreased, and their scale shrank considerably. Two major policies impacted the industry during this time. First, the nationwide "Hedgerow" customs enforcement initiative, launched in February, disrupted operations by slowing down customs clearance, causing container backlogs and additional costs. This hit firms with tight capital chains particularly hard. Second, the implementation of the "Renewable Lead Industry Access Conditions" and "Aluminum Industry Standard Conditions" raised entry barriers and improved industry regulation, promoting technological upgrades and better management, while curbing unregulated players. In summary, Wang Jiwei noted that the market demand weakened, output slightly declined, and production capacity remained underutilized. Processing companies saw shrinking profit margins, and losses increased. Although some enterprises accelerated technological upgrades, overall, China’s renewable non-errous metal industry remains vulnerable and lacks strong resilience against external shocks.

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