Differentiation of non-ferrous metals prices is inevitable Baotaigufen 2008 Yunnan Tin in Jiangxi Copper ...

 Southwest Securities: 2008 Differentiation of non-ferrous metals prices is inevitable
Investment Summary:
1,2008 global economic slowdown will be the trend, its impact will be mainly reflected in the demand for metal products, metal prices will also Therefore the test. nonferrous products as commodities attributes much greater than its assets, properties, and its price more reflective of changes in supply and demand, future changes in supply and demand fundamentals of different metals, metal prices will inevitably lead to the differentiation, we even believe that this trend will inevitably.
2, next year we are optimistic about the varieties of non-ferrous metals are lead, aluminum, titanium, copper and so on. We think next year could lead to new high prices, the annual average price will reach around 22,000 yuan; aluminum prices remain at 19,bailey UGG boots,400 yuan / ton level; for copper next year, we are cautiously optimistic, the annual average price around 58,000 yuan; neutral on tin prices are expected to average 13.2 million per years; Nickel is not optimistic about the estimated average Nickel prices to fall to 25 yuan / ton; we are the least optimistic about the zinc, the average price of 19,500 yuan next year or so.
3, we believe that next year the investment value of non-ferrous metals industry is the most extensive growth that has business. In recent years, a larger domestic and international mining environment changes, especially the continued tightening of domestic government regulation and control measures, access conditions the industry has introduced, with tariffs, foreign investment and other related policy changes, we expect non-ferrous metals large number of sub-sectors of industry consolidation will occur, we recommend attention to those with government-backed enterprises, such as Zhongfu Industry; attention to those funded with the expansion of powerful enterprises, such as Western Mining; attention to those likely to be the central goal of enterprise integration colored old state-owned enterprises such as Tongling Nonferrous Metals, etc..
4, we believe that non-ferrous metals industry will still be a hot investment in 2008, while the epitaxial growth of non-ferrous metals industry will be the next most significant feature, maintain the non-ferrous metals industry the market to pay attention to the background of this global economy, according to the latest IMF and the major economies of the world's economic growth rate forecast, despite the 2008 overall world economic growth will remain at 2007 levels, but the major developed countries and emerging market countries economic growth will slowdown. Meanwhile, we also note that world economic growth next year, still maintained a high growth level of the last three decades.
the other hand, developed countries and emerging market countries appear OECD leading indicator the differentiation. OECD leading indicator is often used to expected future changes in industrial production for six months. industrial production activities are the main factors driving demand for metals, it usually reflects the OECD leading indicator of industrial production and economic development needs of the early warning of metal device. The latest OECD leading indicators developed and emerging market countries OECD indicators were divided, developed by the U.S. economy was the impact of the subprime crisis, the OECD leading indicators show a steady change in the early growth turned slightly callback, Japan, OECD leading indicators is a new low for several months, suggesting the future if the U.S. subprime mortgage crisis continues to expand, the major economies in Europe and America demand for metals is highly likely decline; the emerging markets remained strong leading indicator rise, indicating demand growth in emerging market countries will continue to be the main factors driving metal consumption, which will offset to some extent, the economic slowdown because of the developed countries to the global metals the negative impact of aggregate demand and promote solid growth in metal consumption.
slowdown in economic growth but also in purchasing power. developed PMI index and industrial production has a strong correlation, PMI index can predict future economic trends. U.S. PMI index overwhelmed by the impact of the subprime crisis has 4 consecutive months of sharp decline in October PMI index of 50.9 is reached, close to recent lows, but the declines have been signs of relaxation. Although domestic PMI index also declined in recent months, but temporarily maintained at a high level. We believe that 2008 will be a slowdown in global economic growth trend, but also non-ferrous metals industry needs to face environment, its impact will be mainly reflected in the demand for metal products, metal prices will therefore be tested.
1.2 in emerging markets will continue to drive growth in metal consumption a major force behind
although in recent years as the representative of the Chinese metal consumption in emerging market countries, the world's metal consumption accounts for 50%, but its per capita metal consumption remains low, only a fraction of the developed countries. With the economy continues to boom, accelerating urbanization, huge population base and low per capita consumption, are harbingers of the emerging market countries in the huge potential demand for metals. recent years, domestic consumption growth, while the metal world metal consumption growth has accounted for 70% of the amount, but still has great room for growth. India, Russia and other emerging market countries has 4 times the total population of China, if only copper 7kg per capita consumption calculation, the future need to consume 30 million tons of copper. As these emerging market countries gradually into the industrialization and urbanization, age, contribution to the world economy will be growing, we believe that emerging market countries become an important driving metal consumption growth promoter.
1.3 RMB appreciation trends do not change
is widely expected, the RMB will continue to appreciate significantly. RMB appreciation will reflect the relationship between domestic and international metal prices of SHFE and LME price ratio constantly changing, even lead to one of the arbitrage opportunity. RMB appreciation will also have non-ferrous metals industry, import and export trade of raw materials and products have an impact, non-ferrous metal industries and enterprises will also be because of the different industry chain in which the location of the affected differently .
2.
inevitable differentiation of metal price movements in the trend of the weak dollar, pushing up the excess liquidity of dollar-denominated assets, most of the price, such as crude oil, gold prices continued to rise. This two years, the price of non-ferrous metals and therefore a substantial rise in the prevalence, but we noticed a variety of non-ferrous metals futures price increase was significantly higher than without futures variety, in which the CTA apparently played no small role, They pushed up the futures trading price of the metal to make it deviate from the normal price mechanism of supply and demand, and thus on the spot market also had an impact. U.S. subprime mortgage crisis, CTA appears to avoid the risk of large-scale evacuation signs of commodity trading markets, resulting in short-term part of metal prices falling significantly. We believe that non-ferrous metal properties as a commodity much greater than its commodity asset property, its price will reflect more changes in supply and demand, future changes in supply and demand fundamentals of different metals can cause the differentiation trend of metal prices, we even think that trend will 不可避免 Zheyi.
2.1 Al - prices rose steadily, the China factor was
LME aluminum prices in May 2006 reached historically high point of $ 3,275, have been maintained at a high level consolidation between 2400-2800 dollars. RMB to 05 by the start of the continued appreciation of the impact of aluminum price ratio of domestic Shanghai aluminum and ethics continued to weaken, more recently dropped to a historic low of 6.85 short-term requirements of a rebound, if they consider the cost of tariffs and other factors, we believe that reasonable parity should be around 7.3.
the demand side, the United States in recent years, dragged down by the slowing economy, the amount of new housing starts have continued to decline, Recently, is subject to sub-prime mortgages and deep down, people are worried about the subprime mortgage crisis, expansion of the trauma the U.S. economy, Japan's economy will be affected, the future of the United States and Japan are likely to reduce demand for primary aluminum. On the other hand, with China representative of emerging market countries and the European Economic fundamentals remain good, especially China has replaced North America as the world's largest consumer of primary aluminum market, we expect the demand for primary aluminum in China this year will account for 30% of total global demand. domestic electricity, car, public transport, the rapid development of real estate and other areas will continue to drive the next few years the demand for primary aluminum. the domestic aluminum industry is expanding rapidly in recent years, the future of China is expected to become the world's aluminum center, we expect 2009 domestic aluminum production capacity will add 500 million tons, more will be in situ digestion of primary aluminum, primary aluminum demand is still strong.
supply some new changes. General Administration of Customs (GAC) information display, Recently domestic bauxite imports surged, changing the usual import of alumina-based model, apparently domestic alumina production capacity was a great release. National Bureau of Statistics (NBS) also confirmed the news of our judgments, 1-10 months totaled 15.98 million tons of alumina production rose by 50%, of which more is hit in August a new single record of 1.74 million tons per month throughout the year is expected to exceed 20 million tons. Australia has 06 FOB price of alumina The $ 630 in March fell to 340 dollars at present, the domestic alumina prices fell to 3350 yuan / ton, but taking into account energy and rising shipping costs, we believe that the future of alumina prices likely to remain at that level. electrolysis aluminum, China's primary aluminum production also hit a new high this year, China's output before the September year on year the proportion of total global production rose from 27.2% to 32.5% of the global primary aluminum is basically incremental contribution from China. We believe that China increase in primary aluminum production was mainly due to early problems of power shortage aluminum and alumina industry, high prices and other factors gradually ease, the small production capacity of electrolytic aluminum plant to recover the original, but the State Development and Reform Commission recently issued the conditions, tons of production capacity, but we think the short term pattern of world primary aluminum do not have much impact, China will still be the main factors affecting the world's aluminum. of last year, China began to levy 15% of primary aluminum exports,Bailey UGG boots, the export duties a significant reduction in the primary aluminum exports, the recent news that said it would likely continue to increase export tariffs on primary aluminum, the international aluminum market will become more tense. China from August 1, 2007 from non-alloy aluminum bars, rods collection 15% export tariffs on aluminum exports dropped sharply, we believe that China's future may even become a net importer of primary aluminum.
next year, we expect aluminum prices to steadily, the annual average price of 19,400 yuan / ton. We like to get in the expansion of production capacity of electrolytic aluminum, fabricated aluminum electrolytic aluminum with leading-edge technology companies such as Zhongfu Industrial, off of aluminum stock, and other public and Xinjiang.
2.2 Copper - Copper is expected to be high , concerned about the addition of copper concentrate self-sufficiency rate
early release because of the huge demand from China, the price of copper was $ 5,500 from $ 8,800 on the straight, the LME copper price this year is not much ups and downs, most of the time at 7000-8000 dollars between shocks. Shanghai copper and the relative price relationship between Copper & also because the appreciation of the yuan gradually tend to be reasonable.
copper demand in the future, we believe that this situation may appear, the traditional areas of copper consumption in North America due to the Housing inhibition of the real estate market sluggish demand for copper,UGG shoes, while China and other emerging market demand will grow rapidly. ICSG latest data show that the world's first 8 months of this year, consumption of refined copper rose 7.5% year on year, with China up 38 %, the rest of Asia and Africa were up by 4% and 7%, while the Americas, Europe, consumption of copper is about 2.3% of the decline occurred. refined the main consumer countries to emerging markets also showed signs of metastasis, the first six in India March copper consumption grew by 14.6%, an increase of 3.0% in Brazil, Russia grew by 3.6%. Although the current volume of copper consumption in these countries is not, but, as we mentioned earlier, as to the different stages of economic development, copper demand will gradually be released. We also note that the North American market demand for non-housing sector remains strong construction, copper consumption will not decline substantially.
the supply side, the strike has become the supply of copper concentrate the main factors. This year, from Africa to South America, from miners to the railway workers, the strike continued to spread like a plague, so the tight copper concentrate market to worse, we believe that this situation will not change soon. Large the location of the majority of copper poor infrastructure, energy, water power shortages, political instability and the global credit crunch caused by the limited new mine supply of copper concentrate also contributed to the cause. mining and smelting sectors but also radiate down capacity utilization trend, evident tension of copper concentrate, the domestic copper concentrates, scrap copper imports and increase domestic refined production point of view is not large but also illustrates this point. According to British research institutions Metal Bulletin (MBR) of the statistics, 08 possible start of copper concentrate terms of copper content by about 70 million tons, plus the potential contribution of wet copper cathode production of about 60 million tons next year, the amount of copper added 130 million tons only. If our domestic copper consumption If 5% per year rate of increase estimated, the additional consumption will reach 20 million tons, equivalent to a large copper mine production, we believe that next year, although the copper concentrate market, the situation may appear a small amount of surplus, but the supply of copper will remain very tight.
take into account the inventory is still low, we are cautiously optimistic for next year's copper prices, copper prices are expected to reach 58,000 yuan / ton. copper concentrate supply, the copper smelting enterprises simply profit will be more difficult, the processing fee will be at historically low levels, the proposed self-sufficiency rate and focus on those resources, expansion of capacity of the company have the resources, such as Yunnan Copper, Jiangxi Copper, but also may be concerned about those who engage in deep processing of copper make stability of the processing fee to take the company, such as sea bright shares.
2.3 Lead - Supply is still tight, resources for the year is undoubtedly the king
lead the most shining star non-ferrous metals, LME lead prices of $ 1,600 by the beginning of the straight $ 3,800, or up to 140%, indeed, surprising.
ILZSG latest data show that prior to September this year, the world consumption of refined lead rose a modest 3.7%, China has become the main driving factors of refined lead consumption, China's refined lead consumption rose a strong 20.5% over the same period in Europe, the United States and Japan have different degrees of decline. the field of automotive batteries and industrial batteries are still the main consumer market of lead, refined lead accounted for 80% of total consumption. In recent years, as auto parts manufacturer battery production line gradually moved to the China and Asia as the representative of emerging market countries and regions, so this year from January to July in China and Asia accounted for refined lead consumption in the world, respectively, 31.3% and 49.5%, we believe that this trend will long remain. In recent years, the domestic auto production more than 20% maintained an average annual growth rate, but thousands of car ownership in China is still low, the future of Taiwan's new middle class, a massive amount of growing demand for cars will drive the consumption of lead. We believe that some time in the future China will remain a significant consumer of refined lead, other emerging market countries such as India will gradually become a big consumption of refined lead. Also worth noting is that lead in Application of the field battery replacement for a lack of obvious.
toxic lead often is seen as very few people are willing to mining it, resulting in only a handful of the world's large lead mine, a mine cut any of the world supply of lead are enormous. existing as a lead concentrate of zinc concentrate is often associated with products emerging, associated capacity is limited, which also led to a sharp increase when demand, supply shortages occurred. current year but also because of the lead ore kinds of problems can not function properly concentrate also makes the international market supply tight, such as the annual output of 100,000 tons in Western Australia's Magellan lead mine because of environmental issues has been outstanding after the suspension of shipments, the latest news that will be the fastest in 08 years Start delivery; the same is located in Australia, Mt Lsa and Cannington mine also cut production due to maintenance problems; in Indonesia planned to produce 85,000 tons of lead concentrates in the Dairi mine is also licensed for access to the forest had to postpone their projects later. We that short-term shortage of lead concentrates not fundamentally change the domestic slow growth in imports of lead concentrates also shows galena supply remains tight. China has 35% of world refined lead production capacity, but the collection of domestic exports of refined lead 5 % tariff, but also exacerbated the world's refined lead market tensions.
We are optimistic about the future price performance of lead, lead prices are likely to be high, we expect prices will lead next year, about 22,000 yuan. proposes a focus on a large number of lead resources companies such as Western Mining and the gold Lingnan; but also optimistic that in the secondary resources recycling, aggressive companies such as Yuguang Gold & Lead.
2.4 Ni - prospects are not optimistic that prices will down
LME nickel price this year, the change can be described as breathtaking, May LME3 once dated futures prices had reached record high $ 52,000 / ton, backwardation is as high as $ 4,000 / ton, but then again in 3 months slid 50% now back to the beginning of $ 33,000 / ton level. nickel sharp ups and downs, in addition to withdrawal by the large influx and on CTA, the roots in the supply and demand changes. year, nickel prices high and changes rapidly, one after another through the stainless steel plant reduce production or converting less nickel content of stainless steel 200 series and 400 high-priced deal to reduce the consumption of nickel, followed by a large number of domestic nickel pig iron production there, and phenomenal growth, mainly stainless steel manufacturers have announced direct procurement of stainless steel with nickel pig iron production, resulting in refined nickel-emergence of signs of excess nickel prices Zhixie.
future demand, the nickel price in turn prompted the return of a large number of steel companies began to purchase, especially because of pre-cut and adjust the product mix due to the high end stainless steel supply shortage will lead them on, while now the price makes them easy to accept the increase in inventory. It is estimated that in 2007 the domestic product in the 400 series stainless steel products will reach 2.15 million tons, 29%, an increase of 7 percentage points ; 200 series 26% of 200 million tons, down 3 percentage points; and 300 series only 45% of 3.45 million tons, down 4 percentage points; high nickel and low nickel declining proportion of products, we think it will be a long-term trend, the demand for nickel is a negative impact. in the automotive industry, stainless steel is gradually giving way to aluminum, magnesium and other light metal, stainless steel production, although we believe that increasing the future, but the growth rate of nickel demand is not large . the supply side, domestic and international large-scale nickel project have access to the output period, according to our estimates, the next two years is expected to bring 10 million tons and 26 tons of new capacity, such as BHP Billiton's Ravensthorpe project next year will bring 2.5 tons of production capacity, the domestic industry in Jiangxi and Guangxi Li Wei nickel project next year will bring 1 million tons of production capacity,UGG bailey button, MCC Ramu project, and the color Dagon Hill project in 2009 will enter production period. We also should pay attention to Most of these new projects for the development of laterite nickel ore, but to judge according to our knowledge, difficult to extract, its capacity will not be fully released shortly. In addition, we note that imports of nickel ore this year blowout like growth, but domestic refined nickel production was relatively stable, I believe a lot of nickel ore into nickel pig iron production. According to our estimates, domestic nickel pig iron production this year expected to reach 95,000 tons, up 200% year on year. The Government this year August issued an emergency production of pig iron nickel severe rectification measures, we believe that this measure will eliminate some small-scale enterprises with low level of technical equipment, but driven by profits, will not easily disappear nickel pig iron is expected achievements of some of the scale larger enterprises, the future production of nickel pig iron will largely affect the market demand for nickel.
us cautious in nickel prices next year, estimated average nickel price will drop to 25 yuan / ton. on related to the performance of listed companies next year, we are not optimistic about growth, in particular, is not optimistic about your research Platinum, which has a nickel laterite nickel resources are mine, more a lack of mature development of domestic technology.
2.5 tin - to left or right, look to the supply
Indonesia the world's second largest producer of Xi by the State of Indonesia Zhengdun tin of the country illegally, this year, LME tin stocks dropped significantly, LME tin price is climbing, the once high Zhishang $ 17,500 point.
WBMS data show that the first 9 months of this year the world total consumption of 266,700 tons of tin to reduce 11,300 tons over the previous year, mainly because demand in Japan and the United States were up sharply declined 27.4% and 14.5%. aluminum foil and Lead-free tin solder is the major application areas, but aluminum foil products, more and more challenges from the market gradually eroded, and in the field of tin solder is gradually replaced lead, tin in this market accounted for 50% of total consumption , mainly due to the EU starting in July 2006 for electrical and electronic equipment contains toxic substances restrictions (RoHS) directive. the directive the EU exports of electronics and electronic products to the EU manufacturers in other countries are using the solder use tin-based solder, tin solder increase from 60% the proportion of at least 96%, greatly promoted the consumption of tin. China, Korea, Japan and the United States some states have introduced similar measures. We believe that with this measure increasingly stringent and the continuous promotion around the world and the emerging Asian middle class, the huge demand for electronic products, all will lead the future consumption of tin, but tin consumption is still relatively small. the supply side, China, Indonesia and Peru China is a major producer of tin. Last October the Government of Indonesia on the mines and smelter in the country illegally were strict control measures, a total clearance of about 67,000 tons of production capacity, once supply disruptions caused by tin. Indonesian Government's new measures require smelting plant re-start needs to have its own legal mineral rights and mining, and meet environmental requirements, prohibiting the export of low-grade crude tin can only export refined tin. We believe that the provisions of this complex may limit the short term tin smelting capacity in Indonesia release. On the other hand, the domestic refined tin exports in recent months has been drastically reduced, to September that China has again become a net importer of refined tin. from the World Bureau of Metal Statistics (WBMS) can not be optimistic about the latest data, 07 9 months ago showed a slight excess of the tin market, the state, the first 9 months of total output reached 267,800 tons year on year reduction of 1,200 tons only slightly, showing other countries increased rapidly refined tin production, Indonesia's refined tin production may also is being restored.
refined tin supply in Indonesia is currently not very clear, next year we are neutral on price of tin, tin next year from 13.2 million yuan on average. If you can get a lot of Indonesia's production release of the price does not exclude will likely come down substantially next year, the performance is Tin shares to grow remains to be seen.
2.6 Titanium - Titanium surplus increased sponge, titanium demand remains strong
Recently, we have been building titanium sponge obtained List getting longer, such as Tangshan days He Titanium, Titanium Luoyang double Ruiwan Ji, Zunyi Titanium Oriental, southwest of Guiyang, Titanium, Titanium Panzhihua three sheep, Jiamusi City, Long Xin Titanium, Zunyi Titanium and other compliance Po and so on. We believe that the domestic Titanium market is undergoing significant change, the domestic titanium sponge production will be any significant excess. GAC data show that titanium sponge this year, exports of phenomenal growth, reversed the domestic titanium sponge long-term dependence on imports. sponge Titanium prices by the end of last year dropped more than 20 million to 10 million yuan to the present, signs of significant excess of titanium sponge.
the other hand, benefit from the continued boom in the aviation industry, especially for large commercial aircraft and a large number of new military equipment , the world demand for titanium showed significant growth. Boeing and Airbus, the world's two largest commercial aircraft manufacturer received orders for large twin-aisle aircraft also continue to increase, demand for titanium products will also play pulling effect to the obvious.
domestic demand for titanium products is also very strong in the sports and leisure, power and other areas of significant growth in demand for titanium, especially in other non-ferrous metal prices high, the substitution effect of titanium products, is gradually emerging , the current brass, stainless steel and titanium tube is quite the size of the price, that is brass, stainless steel or titanium tubes have been roughly the same time investment, and the corrosion resistance of titanium is much better than copper and stainless steel, which gives titanium tube provided the explosive growth opportunities. domestic large aircraft program, Chang'e program plans a series of Kuafu the development of aerospace titanium demand will increase greatly. So we are optimistic the market next year, the performance of titanium.
We are optimistic about the future performance of Baotaigufen growth Baotaigufen different from other domestic titanium with many foreign air companies certified, the cost advantage is Titanium foreign tycoons are not available, we expect to Baotaigufen more high-end titanium from aviation orders, recommends continuing concern.
2.7 Zinc - Zinc is not light, the recent London journey home
zinc and zinc have a substantial adjustment of Shanghai, the latest London Zinc prices in November 2006 the record high of $ 4,530 down 48%, this year has fallen by 45%, can be said that abnormal tragic. Shanghai China hit by zinc is in just one month Zhixie 30%. round down the value we think is a reasonable return, reflect changes in supply and demand fundamentals, on the other hand, zinc futures trading in China since the Shanghai zinc and zinc price ratio trend can be seen London, Shanghai and zinc significantly overwhelmed deep down of has its inherent adjustment requirements, especially in the appreciation of the RMB against the backdrop of the Shanghai zinc zinc parity was once London 10, is not normal.
before September this year, the world's zinc consumption rose a modest 3.3% year on year , less than the increase in refined zinc production, with China and the European consumption grew by 10.2% and 5.1%, while the U.S. consumption decreased by 7.9%. China's rapid growth in zinc consumption from domestic production of galvanized sheet rose sharply 53%, while U.S. consumption of most manufacturers use galvanized sheet stock to stabilize market volatility and reduce the demand for zinc. U.S. construction starts and auto production aspects of the data can not be optimistic about next year's zinc consumption in the United States may remain in this year level. European import large quantities of galvanized sheet in recent years, has accumulated a large inventory, consumption of zinc may reduce the future. In Japan, despite the large demand for galvanized sheet auto industry exports increased considerably, but the economic slowdown in Japan Obviously, the future demand for zinc in Japan may also appear reduced. domestic galvanized sheet production in the past 18 months has doubled 3 times, can not be optimistic about future demand.
supply, ILZSG latest data show 1-September world production of refined zinc rose 7.6%, growth was mainly from Australia, China, Finland and other countries. NBS data also show that the first 10 months this year, the National refined zinc output reached 3.038 million tons, an increase of 20.7% zinc smelting capacity in Taiwan for the release to get a lot of zinc concentrate imports increased dramatically also confirms our judgments. the international zinc project approached gradually started a few years into the output of next year, is expected to bring 1.6 million tons of additional volume. in the zinc concentrate is guaranteed and the capacity utilization rising, we expect future domestic zinc production is likely to be high, with international expansion on the part of the smelter, on the international market next year after zinc supply will more adequate.
we believe the zinc market is likely to occur next year, a larger surplus situation, the significant downturn in zinc prices, the annual average price dropped to 19,500 yuan or so. We propose to focus zinc smelting business, the excess will concentrate smelting costs rise, Zinc Industry concern.
3. M & A drama Jianrugaochao, or in booster
business growth in recent years, the international mining M & A events one after another, the World Bank in 1975 to 2006 2005 zinc, lead, nickel, aluminum and copper industries were the top 5 producers of statistics found that the industry concentration of several metals respectively 21.7%, 22.9%, 51.5%, 38.9% and 29.7% to 27.3% , 28.9%, 53.3%, 46.9% and 39.1%. Of course, to the recent merger and new entrants emerging constantly changing industry concentration, but is increasingly becoming a trend of industry consolidation, large companies are more ability to develop large projects, to avoid price risks, achieve better operational efficiency. We also note that more and more from emerging markets through mergers and acquisitions and integration of mining companies to become influential leaders within the industry enterprises, such as Brazil's CVRD acquired the old nickel production companies Inco, Russia and Russia as well as aluminum and aluminum Siberian aluminum assets of Glencore integration of the achievements of the world's largest aluminum company UC Rusal, India, Mittal's acquisition of a company through continuous jump to become the world's largest steel mill. While we were preparing this report, integrated mining producers BHP Billiton and Rio Tinto made a takeover offer. On the other hand, with the domestic non-ferrous metals in recent years, the continuous tightening of control policies, in particular, access conditions the industry has introduced, with tariffs, foreign investment policy changes, we expect industry consolidation will be difficult to avoid, even in the 2008 drama will be staged many mergers and acquisitions, and we hope our analysis through the following investment were found in which more investment opportunities.
3.1 Aluminum in Henan story
the past two years, Henan Province has issued a Eleventh Five-Year enterprises in the aluminum companies, the company East Hope Sanmenxia, Sanmenxia Cayman companies and companies in Luoyang Hong Jiang Wanji configuration. Dengfeng U.S. company, Sanmenxia Xiang Yi Pingdingshan Huiyuan Chemical Industry Group Company and to speed up the aluminum and alumina key focus of business enterprise or and reorganized. In aluminum, the Henan Province, proposed to power in 2010 Ikawa, Xin electricity, Jiaozuo Wanfang, Zhongfu Industry, Shenhuo Group, Group of 6 commercial power production capacity of electrolytic aluminum enterprises should reach 40 million tons, accounting for the proportion of the total size of the province more than 80%. the face of a large number of aluminum companies in Henan Province has proposed the building of seven aluminum enterprise groups, respectively Zhongfu Industry, Shenhuo Group, Jiaozuo Wanfang, Tianyuan Aluminum, Henan Hui Long, Alpha Henan, Henan Aluminum and aluminum. Henan alumina business and actively promote the integration between the aluminum companies, and integrated aluminum companies asked to participate in the annual production capacity to reach 30 million tons (or more) participate in integrated production capacity of electrolytic aluminum enterprises must reach 20 million tons (or more), can be shared and integrated manner, transfer, acquisition, merger and other ways. We note that the spirit of these documents recently Henan Province, municipalities across the province have completed the distribution of bauxite resources by Shenhuo Group, Allianz Group and Cheng Yi Yu established a joint venture in Henan Power Group is intended to integrate Henan colored aluminum industry.
Henan involved in this whole the integration of the aluminum industry, we are optimistic about the relevant advantages of electrolytic aluminum companies (listed companies) the performance in this drama. We believe that with the background of deep integration of seven aluminum companies, whether equity participation, acquisition, merger and other methods are not too easy, we are more inclined to aluminum dominant enterprises (listed company) in Henan Province is integrated aluminum companies, big their production capacity, plus ...