China's Mineral Energy Industry in the First Half of 2016

In the first half of 2016, the world economic growth was lower than expected, and the traditional mineral demand hit a staged "ceiling", supporting the weakness of the mineral product prices and the sound fundamentals of the mining financial market, and the recovery of the mining industry. China's economic restructuring has been further promoted and the economic growth has been fully geared. The demand for mineral products and production scale have collectively declined, and mining enthusiasm continues to cool.

China's economic growth has been fully geared, and the demand for major mineral products has declined

First, structural reforms have caused the “three carriages” that have driven China’s economic development to slow down. China has entered the middle and late stage of industrialization. The pressure of economic growth shifts and the pains of structural adjustment are intertwined, which determines that the downward pressure on China's economy will be greater for a long period to come. From January to May 2016, the country’s investment in fixed assets grew by 9.6% year-on-year, which was the lowest level in 16 years. At the same time, the international competitiveness of “Made in China” has continued to decline, and the scale of exports has tended to decline. From January to May, China exported 5.3 trillion yuan, a year-on-year decrease of 1.8%; in addition, more than two thirds of urban residents in China have mortgages. There is also insufficient motivation for domestic demand. Second, the demand for bulk mineral products has begun to decline collectively after years of rapid growth. At present, the era of high-speed infrastructure construction in our country has basically come to an end, and the economic “troika” has been weakening its demand for resources. This has led to an unprecedented decline in China’s bulk mineral consumption in 2015. Among them, primary energy consumption in 2015 was about 2.87 billion tons of oil equivalent, which was a 3.4% drop from 2014; steel consumption peaked in 2013, and the total decrease in 2014 and 2015 was close to the total crude steel consumption in South Korea in 2014 ( The amount of refined copper, refined lead and refined zinc consumption was approximately 10.8 million tons, 3.8 million tons and 6.3 million tons, respectively, which was a decrease of 4.3% and 9.0% respectively from 2014. , 1.2%.

The scale of traditional mineral production may reach the peak stage, and import trade continues to differentiate

First, the reform of the supply side of the mining industry has led to the collective decline in the production scale of traditional mines. In 2015, the country’s output of raw coal, crude steel, and copper concentrates (metals) were 3.75 billion tons, 800 million tons, and 1.667 million tons, respectively, 3.3%, 2.3%, and 6.6% lower than the previous year; January-May, corresponding The output was 1.34 billion tons, 330 million tons and 711,000 tons, respectively, down 8.4%, 1.4%, and 3.9% year-on-year respectively. The production of lead and zinc concentrates (metals) in 2015 was 2.335 million tons and 4.497 million tons, respectively, down 13.9% and 10.5% from the previous year; from January to April, the corresponding output was 591,000 tons and 1.286 million tons respectively. In the previous year, they decreased by 8.1% and 5.8% respectively. Second, the output of crude oil in modern minerals has declined, and natural gas production has grown steadily. From January to May, the country’s crude oil production was 85.01 million tons, a year-on-year decrease of 3.7%; conventional natural gas production was 59 billion cubic meters, an increase of 5.2% year-on-year; and coalbed methane production was 3.11 billion cubic meters, an increase of 12.3% year-on-year. Third, the import trade of mineral products was significantly different. From January to May, the physical imports of coal, crude oil, iron ore, copper concentrate, bauxite, and tin concentrate were respectively 64 million tons, 156 million tons, 412 million tons, 6.696 million tons, and 21.88 million tons. 216,000 tons, an increase of 2.8%, 16.5%, 9.0%, 33.4%, 17.9%, and 90.8% year-on-year; correspondingly, the physical imports of natural gas, nickel concentrates, lead concentrates, and zinc concentrates were 31.57 billion cubic meters, respectively. Meters, 7.614 million tons, 533,000 tons, and 91.0 million tons, respectively, decreased by 21.4%, 25.2%, 19.7%, and 23.1% year-on-year respectively.

Mining efficiency continues to decline, and mining enthusiasm continues to cool

First, the profits of the mining industry have fallen sharply. From January to May 2016, the national mining industry earned a profit of 6.66 billion yuan, a year-on-year decrease of 94.0%. Among them, the profits from coal mining and washing industry decreased by 73.4% year-on-year, and the profits from the oil and gas exploration industry decreased by 175.8%. Second, the number of effective exploration and mining rights has continued to decline. Since 2012, investors’ interest in mining has dropped significantly. As of the end of May, the country’s effective exploration rights decreased by 8.6% year-on-year, registration area decreased by 10% year-on-year, and effective mining rights decreased by 9.6% year-on-year. The transfer of exploration rights and transfer price decreased by 7.1% and 23.9% year-on-year, respectively, while the transfer of mining rights and transfer price decreased by 19.8% and 14.2% respectively year-on-year. Third, investment in fixed assets in the mining industry continued to decrease. From January to May, the total investment in fixed assets of the mining industry in the country was 305.446 billion yuan, a year-on-year decrease of 16.40%. Among them, the investment in coal, oil and gas exploration and ferrous metal mining industries fell significantly, by 32.90% and 16.90% year-on-year respectively. 24.50%.

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