Prospect of structuralization condition of non-ferrous metal market in 2014

The year of 2013 is almost over, and as for non-ferrous metal industry, it is a year of plain adjustment and new opportunities breeding in economic transition. Look forward to 2014 and 2015, different metal varieties and different industries will step into their brand new life cycle.

Some industries will proceed to a period of rapid growth – new technologies and new materials. It is predicted according to phenomena from policy, battery technology and electrically driven vehicle, lithium battery industry might go through significant changes in next two years. 3D printing has grown vigorously in American and European countries but has just made a figure since 2013, so in 2014 or 2015, this sector is hopeful to maintain rapid growth all over the world, which will drive promotion and R&D improvement in China. And we also see industrialization of graphite/olefinic carbon is gaining speed. In 2013, though some domestic companies claimed they had achieved industrialized mass production of graphite, according to industrial judgment, practical application in large scale should be postponed to 2015. Since 2014, carbon products like mesoporous activated carbon and so on have been put to commercialized application. And in terms of high-temperature alloy, it is anticipated that in 2014 or 2015, China will be able to make breakthrough in aeroengine R&D and achieve mass production and assembly.

Some industries will maintain stable growth – mature new materials. NdFeB, exhaust catalyst and aluminium product etc. have kept growing at high speed for more than a decade. We believe that downstream demand of these materials will be still brisk, followed by newly-emerged consumer sectors from time to time, so it is not difficult to maintain such stable growth rate. Some industries will go into bottom period – typically electrolytic aluminium industry. Launch of new electrolytic aluminium capacity will reach a peak in 2014 and rapidly fall in 2015. Cost of the overall industry will continue to go down, and aluminium price might fall after rise again. Increasing pressured induced by backward capacity might lead to a tide of shutdown. And in 2015, this industry might see a favorable turn on the level of supply and demand.

Some industries will continue the downturn – precious metal and some industrial metal. Industrial metal industry is not pessimistic while precious metal industry is not optimistic. To be more specifically, regarding precious metal industry, due to strong recovery of American economy, attractive power of gold continues to decrease. And regarding some industrial metal e.g. copper etc., definite recovery of European and American economies will increase demand for them, but economy and increase in supply amount of China will be two uncertain factors.

We think we could excavate investment opportunities more easily in the previous two sectors, with involved companies as Jiangxi Ganfeng Lithium, Yinbang Clad Material, CISRI-GAONA Materials & Technology, Hunan Boyun New Materials, Shaanxi Ligeance Mineral Materials, Liyuan Precision Manufacturing, Shandong Nanshan Aluminium, Sino-Platinum, Anhui Xinke New Materials and Shenyang Ingenious Development etc.