From January to March 2020, the nonferrous metals industry maintained generally stable production and operations; however, affected by the COVID-19 pandemic, industry profitability and investment declined year on year, and confidence in future development remained weak.

First, overall production remained stable, and prices have begun to stabilize. From January to March, China’s output of ten major nonferrous metals totaled 14.17 million tonnes, up 2.1% year on year. Specifically, copper, aluminum, lead, and zinc output reached 2.29 million tonnes, 8.84 million tonnes, 1.19 million tonnes, and 1.50 million tonnes, respectively, representing year-on-year increases of 0.4%, 2.7%, a decline of 6.4%, and a rise of 11%. Output of copper and aluminum products stood at 3.67 million tonnes and 10.52 million tonnes, down 5.9% and 6.3% year on year, respectively. During the same period, the average spot prices for copper, aluminum, lead, and zinc were RMB 45,316 per tonne, RMB 13,438 per tonne, RMB 14,504 per tonne, and RMB 17,142 per tonne, respectively—down 7%, 0.9%, 16.6%, and 22.6% year on year. Since April, prices have shown signs of stabilization; as of mid-April, the average spot prices for copper, aluminum, lead, and zinc had rebounded by 9.5%, 5.6%, 2.1%, and 7.2%, respectively, compared with late March.

Second, profitability has declined sharply, and industry confidence remains weak. From January to March, the nonferrous metals sector posted profits of RMB 15.5 billion, a year-on-year decrease of 31.5%. Specifically, mining and processing enterprises recorded profits of RMB 5.0 billion and RMB 4.9 billion, down 34.4% and 42.4% year on year, respectively, while smelting firms reported RMB 5.6 billion in profits, up 2.2% year on year. According to statistics from the China Nonferrous Metals Association, the nonferrous metals prosperity index for March stood at 16.6, indicating a relatively sluggish market environment. In the first quarter, the industry business confidence index was 44.8, a decline of 4 basis points from the fourth quarter of 2019 and the lowest level in three years.

Third, investment declined year on year, while the decline in aluminum exports narrowed. From January to March, investment in the nonferrous metals industry fell by 11.4% year on year, with mining and ore-processing investment down 10.8% and smelting and processing investment down 11.6%. Aluminum exports totaled 1.12 million tonnes, a decrease of 12.2% year on year; this decline narrowed by 8 percentage points compared with January–February. Exports of unwrought copper and copper products reached 223,000 tonnes, up 3.5% year on year.