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Non-ferrous metal smelting enterprises cut pressures

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The fourth quarter of 2015, non-ferrous metal prices continue to edge lower, and record breaking lows, non-ferrous metal smelting enterprises significant deterioration in profitability, the company's production pressures.

Compared with the third quarter, the fourth quarter of 2015, non-ferrous metal industry boom continues to decline, especially in non-ferrous metal prices continued to edge lower and repeatedly hit a record low in the fourth quarter, resulting in domestic non-ferrous metal smelting enterprises significant deterioration in profitability, which so that non-ferrous metal smelting enterprises cut pressure unprecedented increase.

Since December 2015, the domestic non-ferrous metals enterprises intensive coordination meeting was held within the industry, we have to reduce production capacity as an important means to cope with the current industry conditions. In the field of copper smelting in Jiangxi Copper, Tongling Nonferrous Metals, as the representative of the nine domestic copper smelters will cut shows 2016 cathode production of around 350,000 tons, equivalent to 4.5 percent of domestic copper production. In the first quarter of 2016, nine copper smelters to cut 200,000 tons of refined copper to advance the goal has been agreed. If the industry situation continues to deteriorate, we expect the domestic copper smelters will expand production scale, the number of copper production in 2016 will likely higher than the established target of 350,000 tons.

In the aluminum industry, due to overcapacity in copper smelting more severe than the pressure, so the pressure suffered cuts it is unprecedented. According to incomplete statistics, in 2015 the domestic aluminum industry losses of up to 4.0245 million tons, accounting for about domestic electrolytic aluminum production capacity by 10%. Including Weiqiao Group, including industry leaders have joined the production team, and as the new China's first aluminum plant in the fourth quarter even Fushun Aluminum electrolytic aluminum production line shut down the line. In addition to zinc and other base metals copper and aluminum varieties, the pressure to cut small metal varieties are equally grim. The end of 2015, seven large domestic smelters including Jinchuan Nickel Group, including in 2016 announced it would cut nickel output less than 20%, and in December 2015 to cut 15,000 tons of nickel early implementation of the mandate.

Currently, due to the overall decline in all kinds of non-ferrous metal prices and significantly below the cost line, forcing major smelters had to have taken substantial measures to cut production in response to tough market conditions and operational difficulties. In the production at the same time, major non-ferrous metals companies also proposed to the government by non-ferrous metal industry association of strategic purchasing and storage program, hoping to absorb excess metal resources in the market by way of purchasing and storage, thus promoting the overall rise in metal prices. Believes that the current difficulties faced by non-ferrous metal enterprises are mainly downstream demand caused by the macroeconomic contraction due to capacity non-ferrous metal industry is the future for a long period of time necessary to advance the mission, which will also have to go through the painful transition period . Reserve, financial subsidies and other administrative measures for non-ferrous metal industry production capacity to no apparent benefit.

Equity Code:000066
Address: Henan Province Xingyang Wulong industrial agglomeration area