It is reported that Chinese Ministry of Industry and Information Technology has finished drafting of the “Specific Plan for Utilization of Secondary Nonferrous Metals in 2009-2015,” which is ready for soliciting public opinions.

The plan says that the country will produce 11 million tons of secondary nonferrous metals by 2015, almost double the current amount, according to Wang Gongmin, an official of China Nonferrous Metals Industry Association.

By 2015, the plan determines that secondary product outputs of refined copper, aluminum, and lead should amount to over 40 percent, 30 percent, and 30 percent of that the yearly outputs of refined copper, electrolytic aluminum, and refined lead.

According to the plan, the country will also launch some demonstration projects, industrial parks, and markets, which will benefit from the government’s capital and policy supports.

China’s secondary nonferrous metals total output was 2.51 million tons in the first half of this year, including secondary copper of 950,000 tons and secondary aluminum of 1.2 million tons, down 16 percent and 7.6 percent respectively on year.

China’s producers of secondary nonferrous metals are mostly private companies. According to Wang, the industry has seen excessive production capacity. Therefore, the plan will establish new access threshold for establishment of new companies, so as to optimize the industry’s structure.

In 2008, China produced 5.3 million tons of secondary nonferrous metals, with an overall output value of over 220 billion yuan. As a number of enterprises launched new projects with low costs during the financial crisis, the country is expected to add a new production capacity of 1.2 million tons this year.

China is the largest importer of nonferrous scrap metals in the world, with two thirds of the country’s demand being imported from abroad.

Wang warned that producers should remain prudent in expanding production capacities, since nonferrous scrap metals are of a limited amount in the world.

The production of secondary metals is more environmental friendly than that of primary metals. For example, the energy consumed in producing secondary aluminum only requires 5 percent of that in producing primary aluminum.

It is reported that Chalco, the listed arm of China’s top aluminum producer Chinalco, announced on Tuesday that its net profit in the third quarter had tumbled 87.7 percent from the same period last year mainly due to the drop of its sales prices.

Chalco said that its net profit came to 21.3 million yuan in the July to September period, compared to 173 million yuan earned in the same period of the previous year.

Dragged on by faltering market demand, aluminum prices in China nearly declined 20 percent year on year in the third quarter to 15,200 yuan/ton.

The company’s revenue in the third quarter also slipped 10.7 percent from 19.1 billion yuan from the period one year earlier to 17.1 billion yuan.

It is said from Kang Yi (chairman of China Nonferrous Metals Industry Association) at the National Nonferrous Metals Industrial Development Forum on Monday that China’s nonferrous metals industry is recovering and major large-scale nonferrous enterprises have mostly escaped from their previously difficult positions.

China’s nonferrous metals industry began heating back up in March. By May, the industry’s major large-scale enterprises had climbed out of the red and become profitable. In the third quarter, most large enterprises managed to shake off their difficulties and return to normal operation.

From January to September, the industrial added value of the nonferrous industry increased by 9.3 percent on a year ago, 0.6 percentage points higher than the national average. Output of the ten major nonferrous metals totaled 18.6 million tons, down 1.87 percent on year. The association expects this year’s output to surpass last year’s by a small margin. Meanwhile, the first three quarters saw a fixed assets investment of 187 billion yuan in the industry, up 15 percent from a year ago, and investment for newly started projects of 195.6 billion yuan, up 18.5 percent on year.

“Although nonferrous metals firms have mostly come out of troublesome situations, the whole industry’s future remains uncertain,” said Kang.

From January to August, large-scale nonferrous companies earned a combined profit of 30.8 billion yuan, down 61.9 percent on year, and their total import and export value dropped 27.4 percent on year to 48.7 billion US dollars.

Kang expects that 2009 will generally see increased imports and decreased exports of nonferrous metals. “The global financial crisis still carries many uncertain impacts,” Kang noted.

China’s nonferrous industry was among the earliest to be impacted by this round of global financial crisis, with product prices dropping significantly and exports shrinking sharply. In response to the financial crisis, China’s State Council unveiled the Restructuring and Reinvigorating Plan for Nonferrous Industry early this year.

Further, related government departments purchased aluminum, copper, zinc, titanium ingot and indium for state reserves, improved export rebate rates of 78 tariff items, scratched 30 nonferrous metals and chemical compounds from the barred-from-export list, lowered export duties of 17 nonferrous metals and approved 15 electrolytic aluminum producers with cheaper power prices via direct power supply.

It is warned from Chen Jinghe, president of China’s largest gold producer Zijin Mining Group, that the prices of mineral products, particularly nonferrous metals in China have surged to high levels and there isn’t much room for them to go up further. Zinjin Mining Group is the parent company of Zijin Mining.

“Unless the US dollar depreciates significantly, there won’t be much room for mineral prices to rise further,” Chen said, advising prudent attitude towards the current rising prices of nonferrous metals.

Zijin Mining made profit of about 400 million yuan in the first half year thanks to surging prices of mineral products on the international market. The company is estimated to earn 10 percent more profit in 2009 than last year.

It is said from Liu Zhichao, chairman of the China Futures Association, that more and more Chinese enterprises are participating in futures trading as the domestic futures market strengthens its influence.

According to Liu, 90 percent of Chinese spot copper enterprises have taken part in futures trading to hedge against risks.

Currently, nonferrous metals prices on the Shanghai Futures Exchange, China’s major futures market for metals trading, have gradually become important references for related enterprises to conduct trading both at home and abroad.