China released work plan to stabilize growth in raw material industries amid weak demand, falling profit
China released work plan to stabilize growth in raw material industries amid weak demand, falling profit

China released work plan to stabilize growth in raw material industries amid weak demand, falling profit

China released a work plan to stabilize growth in the four major raw material industries including steel, petrochemical, non-ferrous metal and building material in 2023 – 2024 amid sluggish demand and sliding profit.

The country will maintain a steady growth of the building material industry in the period of 2023 – 2024, aiming to achieve a growth of 3.5% in the industry’s output in 2023 and around 4% in 2024, according to the work plan released by Chinese departments including the Ministry of Industry and Information Technology on Friday.

The average annual growth of the revenue of the companies in the green building material industry, mineral functional material industry and inorganic non-metallic new material industry will exceed 10%, and the numerical control rate in major industries’ key processes will exceed 65%, and the proportion of the capacity above energy efficiency benchmark in the cement, glass and ceramic industry will be more than 15%, it said.

China will maintain steady growth in the output of major non-ferrous metals such as copper and aluminium in 2023 – 2024, with the average annual growth of the ten major non-ferrous metals to be around 5%, it said.

Domestic development of strategic metals including copper, aluminium, nickel, lithium and platinum group metal will be stepped up during the period, the quality of deep-processed non-ferrous metal product supply will improve further and the supply and demand will achieve a dynamic balance, according to the plan. 

The non-ferrous metal industry’s revenue will continue to grow, fixed-asset investment to increase further, green and intelligent upgrading to accelerate and the average energy consumption per unit of copper and lead to decline by more than 2%, it said. 

China aims to achieve around 5.5% growth in non-ferrous metal industry’s output in 2023 and more than 5.5% growth in 2024, it said. 

For the steel industry, China will maintain a dynamic balance in supply and demand in 2023, with the fixed-asset investment to grow steadily, economic effectiveness to increase significantly, the ratio of R&D to reach 1.5% and the industry output to increase by around 3.5%, according to the plan

In 2024, the steel industry’s development environment and industrial structure will continue to optimize and the industry will become more high-end, more intelligent and greener, with industry output to rise by more than 4%, it said. 

In the petrochemical industry, China will promote construction of major projects, step up technological transformation, promote intensive development, according to the plan, which required that more than five major ongoing petrochemical projects should be completed and put into operation by the end of 2024.

Due to the slowdown of the global economy, the complex global geopolitical environment and the downturn in the real estate market, the demand for upstream raw materials weakened and the prices of non-ferrous metals, building materials, steel and petrochemical products have mostly trending lower, sharply squeezing the industries’ profit.

According to data from the National Bureau of Statistics, the total profit generated by the building material industry fell by 23.6% year over year in the first half of 2023, that of non-ferrous metal industry tumbled 44%, chemical material and product manufacturing industry tumbled 52.2% and ferrous metal industry slumped 97.6%.