The Most Essential and Authoritative Source for. Copper & Copper Fabrication Monthly December 2014 No. 216 INSIDE THIS ISSUE.

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1 The Most Essential and Authoritative Source for Chinese Metals Copper Market & Copper Fabrication Monthly No.216 Copper & Copper Fabrication Monthly December 214 No. 216 Hosted by: China Nonferrous Metals Industry Association Published monthly by: Beijing Antaike Information Development Co., Ltd. Editor:Janey Ding (Ms.) Research Team: Wang Jun (Ms.); Yang Changhua (Mr.); Qiao Bo (Mr.); He Xiaohui (Mr.); Zou Jiancheng (Mr.);Deng Xin (Mr.) Wang Weiwei (Ms.) Sales Manager: Xiaofei Yang (Ms.) Tel: Fax: Website: Address: 2 nd Floor, 12B Fuxing Road, Haidian District, Beijing 1814, P. R. China Disclaimer: Whilst every effort has been made to prepare this report, Beijing Antaike Information Development Co., Ltd. makes no warranty of any kind in regard to the contents and does not accept responsibility for any losses or damages arising directly, or indirectly, from the use of this report. All Rights Reserved: The contents of this report are for the sole use of the client and its employee and may not be transmitted in any form whatsoever to third party. 214 Beijing Antaike Information Development Co., Ltd. This issue was dispatched on Dec. 9, 214. INSIDE THIS ISSUE Supply-Demand Balance... 2 Price Trend... 3 Copper Supply... 4 Copper Supply-Mine... 4 Copper Supply-Smelting/refining... 5 Copper Dmand... 7 Copper Semis... 7 Demand indicators... 9 Import & Export Copper Market Outlook News in Brief Statistics Chinese Refined Copper Output by Region in Chinese Copper Semis Output by Region in Copper in Concentrate Output Chinese Imports and Exports of Cu Products in Copper Price and Stocks on SHFE and LME Output of Major Copper-using Products and Investment Development and Investment of Chinese Real Estates Copper Scrap Price on Chinese Spot Market in Quotation of Refined Copper by Producers & Traders China Metal Market Order Form

2 Supply-Demand Balance Copper Concentrate Unit: kt copper metal Q1 214 Q2 214 Q3 214 Oct-14 Domestic production 1,248 1,47 1, Import 1,721 2,114 2, Supply 2,969 3,521 4,262 1,48 1,56 1, Demand 3,66 3,336 3, ,63 1, S/D balance Refined Copper Unit: kt Q1 214 Q2 214 Q3 214 Oct-14 Domestic production 5,185 5,615 6,179 1,551 1,676 1, Import 2,835 3,393 3,26 1, Export Demand 7,33 7,68 8,2 2, 2,25 2,21 75 S/D balance 533 1, Raw Material Structure Unit: kt Q1 214 Q2 214 Q3 214 Oct-14 Refined copper production 5,185 5,617 6,179 1,551 1,676 1, From mine 3,371 3,722 4,282 1,131 1,211 1, From scrap 1,814 1,895 1, Source: Antaike In October of 214, domestic production of copper in concentrate increased by 1.43% against the previous month, and the consumption increased by.75% on a monthly basis. The production was 142kt in October, the import was 249kt, up by.81% against the previous month, and the consumption was 45kt. There was a shortage of 14kt in the market. The supply surplus of refined copper increased in October, benefiting from the rising import. The domestic output was 61kt, up by 1.67% on a monthly basis. The consumption was 75kt, up by 1.35% MoM. The import was 36kt, up by 33.4% over the previous month, and the export was 15kt, down by 25% against the previous month. There was a surplus of 151kt. The supply of copper concentrates increased in recent months, which helped the refined copper production to retain basically the same with the previous month, although there was still a shortage of copper scrap supply. The refined output from scrap in the month was 169kt, and that from copper concentrate and imported copper blister was 441kt, accounting for 27% and 73% of the total output, respectively. 2

3 Price Trend Copper Price on SHFE&LME (Unit:RMB/t) 65, 6, 55, 5, 45, 4, Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 SHFE 3-M & Cash Month Cu Price (Unit:RMB/t), Contango 65, 6, 55, 5, 45, SHFE 3-M Cu-L SHFE/LME 3-M Cu Price Ratio LME 3-M Cu-R 4, Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 SHFE 3-M Cu-L Contango-R SHFE Cash Cu-L Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 SHFE/LEM Price Ratio 3, 2, 1, -1, -2, -3, 9, 8, 7, 6, 5, 4, Copper price on LME fluctuated between US$ 6,6/t and US$ 6,75/t. Due to the mixed factors from domestic and foreign countries, copper prices lost its direction. But copper price fell down by more than 3%, which was dragged down by strong dollar and worries about the slowing down of inflation rate in the Eurozone and Japan that was aroused by the international oil prices falling. Copper price fell down to the lowest of US$ 6,321/t. In November of 214, LME cash price and three-month copper price averaged at US$ 6,71/t and US$ 6,638/t, decreasing by.56% and.73% on a yearly basis, and declining by 5.17% and 6.12% on a monthly basis, separately. From January to November of 214, LME cash price and three-month copper price averaged at US$ 6,899/t and US$6,866t, down by.97% and 6.75% on a yearly basis, separately. In November 214, SHFE cash price and three-month copper price averaged at RMB 47,646/t and RMB 46,986/t, decreasing by.6% and.87% on a yearly basis, and declining by 6.56% and 7.52% on a month basis, separately. Domestic copper price followed the trend on the LME, with fluctuation range between RMB 47,/t and RMB 48,/t. Good support from interest rate cut by Chinese banks disappeared quickly. Copper price touched a new low at the end of November. Copper price fell down to RMB 45,/t on November 28 with a falling trend. From January to November of 214, SHFE cash price and three-month copper price averaged at RMB49,167/t and RMB48,593/t, both declining by 7.79% and 8.53% on a yearly basis, separately. The average copper price on the spot market quoted by Antaike was RMB 47,959.8yuan/t in the month, down by 278 yuan/t compared with the past. 3

4 kt Copper & Copper Fabrication Monthly No.216 Copper Inventory of SHFE & LME LME copper inventory experienced small 1, Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 LME Stock SHFE Stock fluctuation around 16kt. Copper price only had a limited influence on the change of inventory, because investors put much more attention to macro economy. SHFE copper inventory moved around 9kt. Buying from downstream market ever increased when copper price fell, but buyerschanged to be cautious because of unclear price trend. Together with new stocking and the adjustment of price ratio between SHFE and LME, copper inventory saw a slight increase. News on purchasing and storage of copper from State Reserve Bureau gave a certain support to copper price, but need to be verified. As a whole, current inventory had no guidance toto the copper price trend. Copper Supply Copper Supply-Mine Mine Capacity & Utilization Jan-13 May-13 Sep-13 Source:Antaike Capacity(kt,Cu metal)-l Jan-14 May-14 Sep-14 Copper Concentrate Production (metal content, kt) Utilization rate-r According to Antaike s statistics, the capacity utilization rate was 14% and the output of copper-in-concentrate increased by 1.43% MoM in October. According to NBS, the output of copper-in-concentrate in the first ten months was 1.568Mt, a rise of 6.2% YoY. We believe the real figure was lower than that, which was estimated to be 1.3Mt by Antaike. Antaike s survey results showed that the figures of domestic copper-in-concentrate output issued by the NBS was exaggerated in some regions, especially the figure in Inner Mongolia. We thought the original figure in Inner Mongolia was the physical weight in stead of metal content. So Antaike adjusted the original figures down. 4

5 Feb-11 Oct-11 Jun-12 Feb-13 Oct-13 Jun Cu Conc. output in the month-l MonthlyYoY-R Source:NBS Copper Supply-Smelting/refining Smelting Capacity & Utilization Jan-13 May-13 Sep-13 Jan-14 May-14 Sep The utilization rate of smelting capacity averaged at 78.8% in October, almost the same as that in September. Capacity(kt,Cu metal)-l Utilization rate-r Source:Antaike Refining Capacity & Utilization Jan-13 May-13 Sep-13 Jan-14 May-14 Sep The Chinese refining capacity utilization in October reached 72%, slightly higher than the previous month. Domestic refined copper production increased slightly in October against the previous month. Capacity(kt,Cu metal)-l Utilization rate-r Source:Antaike 5

6 kt Copper & Copper Fabrication Monthly No.216 Refined Copper Output Jan Mar May Jul Sept Nov Source: CNIA Ref. Cu Output By Region in Jan-Oct 17% Jiangxi 34% Anhui Shandong 17% Gansu Hubei 6% 11% 15% Others According to the data from NBS and CNIA, refined copper output in October was 734kt in October, up by 14.% YoY and 2.7% MoM. The output amounted to 6.42Mt from January to October and increased by 11.4% on a yearly basis. According to Antaike s survey, the output of Chinese 11 copper cathode producers reached 468.3kt in October, accounting for more than 7% of Chinese total and rising by 3.93% against the same period of 213. The monthly average operation rate was 1% based on 11 sample companies in October (which was benefited from more than 1% capacity utilization in some sample companies in October), higher than 91.65% in October. Among them, TNMG, JCCL, JNMC, Daye, Zhongtiaoshan and Xinye Copper Co., Ltd. reached their full capacities; the operation rate of CHALCO Yunnan Copper Co., Ltd and Dongying Fangyuan Nonferrous Metals Group was more than 8% and the lowest operation rate was only 5.66%. Near the end of the year, most smelters lifted the operation rate under the condition of abundant supply of copper concentrates, which pushed the production of domestic refined copper higher. Source: CNIA 6

7 kt Copper & Copper Fabrication Monthly No.216 Copper Demand Copper Semis Copper Semis Production 1,8 1,6 1,4 1,2 1, Jan Mar May Jul Sep Nov Cu Semis Output By Region in Jan-Sept 28% 1% 13% 17% 16% 16% Zhejiang Jiangsu Jiangxi Anhui Guangdong Others The output of copper semis in October reached 1.51Mt, up by 12.5% YoY and.9% MoM. The output accumulated to 14.36Mt from January to October,up by 13.5% YoY. Zhejiang, Jiangxi, Jiangsu, Anhui and Guangdong remain as the top five regions of copper semi production in recent years. The output in Jiangsu exceeded that in Jiangxi and ranked No.2. Benefiting from cheaper labor cost, lower energy cost and favorable government policy, the copper fabricating industry enjoys fast development in Jiangxi and Anhui, where growth rates reached 8.49% and 35.91% separately from January to October. Copper semis output in Shandong experienced great growth since 214, seeing a growth rate of 42.9% in the first ten months of 214. Copper Wire rod Capacity Utilization 9% 82% 83% 8% 78% 81% 81% 75% 76% 73% 7% 68% 6% 6% 5% Jan-14 Mar-14 May-14 Jul-14 Sep-14 Cu Wirerod Capacity Utilization Source:Antaike Antaike did research on Chinese 16 copper rod producers through field survey and over the phone, covering Jiangxi, Jiangsu, Tianjin, Shandong, Guangdong, Anhui, Yunnan, and other regions. Among them, 16 companies imported 12 continuous casting lines (12 SCR lines with wirerod capacity of 2.69Mtpa and 8 CONTIROD lines with wirerod capacity of 1.965Mtpa) and one company imported La Farg copper scrap processing line from Italy with capacity of 12ktpa. Total capacity of 16 copper wirerod producers reached 4.775Mt, representing 5% of Chinese total. Based on the survey results, 16 copper producers produced 323kt copper wirerod in October of 214, with capacity utilization rate of 81.2%. In a breakdown by regions, capacity utilization 7

8 rate in eastern China was 76.1%, 3.3 percentage points lower than the previous month. Downtream market saw the following features: first, some large sized companies held stable supply of raw materials, whose capacity utilization increased; second, sales model was changing. The proportion rate of sales volume to traders was declining as copper smelters tried to control risks. Capacity in southern China was 9.3% in October. The capacity utilization rate in the area (JCC Guangzhou Zengcheng copper project included in eastern China, but excluded in the area) was pushed up by the month on month rise of output in Tai-I Jiang Corp (Guangzhou) Co., Ltd.. The capacity utilization rate in northern China was 7%, with 3.9 percentage points lower than that in August. The output of copper wire rod in the area began to decrease due to unstable raw materil supply together with tight cash flow withwith traders. Copper wirerod producers in the area need to purchase raw materials from other places. According to data from China Customs, China imported 5.75kt copper rod (with the maximum cross-sectional dimension>= 8 mm) in October. The import amounted to 65.6kt from January to October, down by 28.11% YoY. The export accumulated to 14kt from January to October, up by 16% YoY. Copper Tube Capacity Utilization 11% 1% 9% 92% 98% 97% 95% 93% 8% 7% 6% 75% 72% 71% 78% 63% 5% Cu Tube Capacity Utilization After entering October, air conditioner manufacturers had completed signing long term contracts with copper tube producers. The estimated stock of national air condtioners were 22 million units, which means that the destocking of the big storage was the main job for air conditioner companies. As a result, order forms decreased by 4% against last year, even more in small sized copper tube producers.the monthly average operation rate of Chinese copper tube producers fell down to 63%. Source:Antaike 8

9 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Copper & Copper Fabrication Monthly No.216. Copper Strip & Plate Capacity Utilization 75% 7% 65% 6% 55% 5% Source: Antaike 6% 58% 67% 63% 68% 7% 68% Cu Strip&Plate Capacity Utilization 63% 65% 62% Antaike did research on 1 domestic copper strips & plates producers, which own 6ktpa of production capacity, by field trip and over telephone survey. According to the survey results, these sampling companies well operated in October, with total output slightly lower than September. The output of sampling companies reached 35kt in October, with comprehensive capacity utilization rate of 62%. With regards to the production breakdown by regions, the comprehensive capacity utilization rate in southern China actually ranked ahead of other regions, approaching to 81%. Then it followed by eastern China, whose comprehensive capacity utilization closed to 8% in October, with 4 percentage points lower than the previou month. The comprehensive capacity utilization rate in northeastern China was 7% and in northern China only 6%. The comprehensive capacity utilization rate in central China was 47%. Demand indicators By End-using Products 4 2 Mar-14 May-14 Jul-14 Sep YoY Growth Rate of Auto YoY Growth Rate of Power Equipments YoY Growth Rate of AC Motor Data from NBS shows a sluggish consumption although it was in a peak consumption season based on the output of main copper end-using products. Most products had month on month declines except autos and transformer. The output of auto, refrigerator, air conditioner and power cable had year on year increase in October, although some products output were not in such case. From January to October, the output of ice-box, transformer, communication and electronic cable decreased on yearly basis. As a whole, the consumption by end-using sectors had no obvious improvement. 9

10 Mar-14 May-14 Jul-14 Sep-14 YoY Growth Rate of Household refrigerator YoY Growth Rate of Household Ice-box YoY Growth Rate of Air conditioner YoY Growth Rate of power generation Investment in Chinese Electric Power Industry Jan-Feb Jan-Apr Jan-Jun Jan-Aug Jan-Oct Source: CEC Chinese Property Industry in Power Source (bln RMB)-L in Power Grid (bln RMB)-L YoY Growth Rate of the whole Investment-R -2 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 YoY Growth of Floor Space of Commercial houses Completed YoY Growth of Sales Area of Commercial Houses According to the statistics released on the website of China Electricity Council (CEC), Chinese power consumption from January to October amounted to 4,548.4 TWh, up by 3.8% on a yearly basis, 3.6 percentage points lower than the same period of 213. The newly added power generation capacity was Mln Kw in the first ten months, and decreased by 5.24 Mln Kw against the same period of 213. The hydro power capacity, thermal power capacity, nuclear power capacity, wind power capacity and solar power capacity is Mln Kw, Mln Kw, 3.29 Mln kw, 7.36 Mln Kw and 1.96 Mln Kw, respectively. Substation capacity of the newly-added power grid construction with more than 22 KV reached Mln KVA and length of Ac line was 26,468 km, increasing by Mln KVA and decreasing by 2,993 km compared with the same period of 213. Investment in Chinese property industry was 7,722 billion yuan from January to October of 214, nominally up by 15.9% YoY,.2 percentage points lower than that from January to September of the year. Of that, investment in residential houses was 5,246.4 billion yuan, up by 11.1% YoY,.2percentage points lower than that in the first nine months of the year, accounting for 67.9% of the total investment in real estate. Chinese Real Estate Investment Completed 1

11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 YoY Growth Source: NBS Govt Economic Data Manufacturing PMI Readings Jan-14 Mar-14 May-14 Jul-14 Sep-14 Source: NBS, CFLP The official manufacturing purchasing manager's index (PMI) slipped to 5.3 in November from 5.8 in October, but remained above the 5-point mark that separates growth from contraction on a monthly basis, according to data released by the National Bureau of Statistics (NBS) and China Federation of Logistics and Purchasing. Another PMI reading from the HSBC, also released on Monday, stood at 5. in November after a 5.4 print in October. Although the November PMI fell slightly, it remained above the boom-bust line, suggesting the manufacturing sector was generally expanding. Import & Export Copper Concentrate (1) Jan-14 Mar-14 May-14 Jul-14 Sep-14 Net Import of Cu Conc. (physical weight,kt)-l YoY Growth rate-r China imported 956kt copper concentrates in October, seeing a year on year rise of 1.27% and month on month decline of 25.8%. The accumulative import from January to October of 214 reached 9.535Mt, up by 17.4% YoY. The great month on month drop was considered normal considering the National Day Holiday and a large number of import in September from Mongolia. Copper concentrates were imported by Anhui, Shandong, Inner Mongolia, and Jiangxi etc. Anhui imported 2.17Mt in the first ten months, accounting for 23% of the total and ranked the No. 1 importing region, followed by Shandong and Inner Mongolia, which accounted for 17% and 12% of the national 11

12 Cu Conc. Import by Destinations in Jan-Oct Anhui 33% 23% Shandong Inner Mongolia total import, separately. The suppliers of copper concentrate are Chile, Peru and Mongolia, which contributed 2.3Mt, 1.67Mt and 1.6Mt to Chinas copper importin the first ten months, accounting for 24%, 17% and 11% of the total, respectively. 7% 8% 12% 17% Jiangxi Gansu Others Copper Blister (2). (4) Jan-14 Mar-14 May-14 Jul-14 Sep-14 Net Import of Cu Blister (physical weight,kt)-l YoY Growth rate-r Cu Blister Import by Destinations in Jan- Oct Jiangxi 27% 29% Shandong Data from China Customs shows that the import of copper blister and anode reached 39.14kt in October, down by 11% on a monthly basis and down by 3% over the same period of 213. The import amounted to 491kt from January to October, down by 4.26% YoY. Copper blister was imported by Jiangxi, Shandong and other regions where the major copper smelters or refineries are located. Jiangxi imported 14kt in the first ten months, accounting for 29% of the total and ranked the No. 1 importing region, followed by Shandong and Shanghai, which accounted for 23% and 1% of the country s total respectively. The suppliers of copper blister are still Zambia, Chile and DRC, which contributed 199kt, 19kt and 43kt to China s copper blister import in the first ten months, accounting for 41%, 38% an 9% of the total, respectively. Shanghai 5% 6% 1% 23% Hubei Guangxi Others Source: China Customs 12

13 Copper Scrap Jan-14 Mar-14 May-14 Jul-14 Sep-14 Net Import of Cu Scrap (physical weight,kt)-l YoY Growth rate Import-R Cu Scrap Import by Destinations in Jan- Oct 4% 1% Guangdong Zhejiang 9% 11% 35% Tianjin Shandong Guangxi 31% Others The import of copper scrap was 332kt in October, down by 7.% YoY and down by 15.2% MoM. The import amounted to 3.187Mt from January to October, down by 1.2% YoY. Current supply of copper scrap was still tight. Besides, copper price was firm and downstream demand was weak. the big month on month decline was not a surprise. Copper scrap was imported by Guangdong, Zhejiang, Tianjin, and Shandong etc.. Guangdong imported 1.1Mt in the first ten months, accounting for 34% of the total and ranked the No. 1 importing region, followed by Zhejiang and Tianjin, which accounted for 31% and 11% of the national total, separately. The suppliers of copper scrap are U.S, Hong Kong and Australia, which contributed 66kt, 465kt and 343kt to China s total scrap copper import in the first ten months, accounting for 21%, 15% an 11% of the total, respectively. Source: China Customs Refined Copper Jan-14 Mar May Jul-14 Sep-14 Net Import of Ref. Cu (physical weight,kt)-r YoY Growth rate According to data from China Customs, the import of refined copper was 36kt in October and experienced a year on year rise of 4.5% and month on month rise of 5.9%. The import amounted to 2.954Mt from January to October, with a year on year growth of 15.2%. in a breakdown by trading method, import in the general trade was 174kt, which increased by 34.9% on a monthly basis and declined by 2.3% YoY. Imported refined copper in entrepot trade through warehouses in bonded zones was 89kt, down by 25% YoY. The copper export was 15kt in October and rose by 1.9% YoY or dropped by 29.2% MoM. The accumulative export was 22kt from January to October, down by 1.6% YoY. The transfer frequency and volume to warehouses in the LME reduced. With the price arbitrage between SHFE and LME being repaired, the export was expected 13

14 Cu Ref. Import by Destinations in Jan- Oct 5% 8% Shanghai Shandong 1% 49% Guangdong 11% Zhejiang Jiangsu 17% Others Source: China Customs to be stable. Refined copper was imported by Shanghai, Shandong, Guangdong and etc.. Shanghai, where SHFE was located, imported 1.43Mt in the first ten months, accounting for 49% of the total and ranked the No. 1 importing region, followed by Shandong and Guangdong, which accounted for 18% and 1% of the national total respectively. The suppliers of refined copper are Chile, India and Australia, which contributed 1.2Mt, 275kt and 257kt to China s refined copper import in the first ten months, accounting for 34%, 9% an 9% of the total, respectively. Copper Market Outlook Domestic refined copper production was expected to be influenced by annual overhaul with the coming of the year end, with slight decrease of the whole output but still at a high level. The consumption will basically stable in November, with a good expectation but not worth much. The supply will be higher than the demand, still with a big surplus. The Supply/Demand Balance for Refined Copper, unit: kt Nov. 214 Production 63 Net import 27 Supply 9 Consumption 75 S/D balance 15 Source: CNIA, China s Customs, Antaike; 14

15 News in Brief Zijinshan Copper Mine SX-EW Plant produces 15kt SX-EW copper Yilong Group to build 3ktpa copper semis project JCCL's net profit down by 5.89% YoY Zijinshan Copper Mine SX-EW Plant produced 15,44.92 tonnes of SX-EW copper, which broke through 15kt for the first time and increased by 32.48% against the same period of 213. Zijinshan Copper Mine SX-EW Plant achieved great economic benefits from the treatment of copper-bearing acid drainage. Henan Yilong Group signed cooperation agreement with Chinalco Shanghai Copper and China Nonferrous Metals Processing Technology Co., Ltd, in order to build 3ktpa copper and alloy tube, rod, wire and rod project mainly used in electronic power, thermal power, petrochemical industry, water desalination, shipbuilding, transportation and air conditioning etc. industries. Luoyang Longji Copper Science and Technology Ltd. will be jointly built for the project in Yichuan County, Luoyang City of Henan Province. Jiangxi Copper Co., Ltd. (JCCL or SH) issued its financial results for the first nine months of 214. The report indicates that operating revenue increased by 11.74% during the reporting period against the same period of 213. Net profit reached 2.3 bln yuan, down by 5.89% YoY. JCC, as parent company of JCCL, is located in Guixi City, Jiangxi Province. JCC produced 1.12Mt copper cathode and 83kt copper semis in 213. JV gets the bidding qualification for railway products Ganzhou Jiangwu La Farga high-speed Railway Copper Materials Co., Ltd. (short for JV) s railway copper alloy products got the Ascertainment Certificate from China Railway Corporation and related relevant departments, which means the company will be qualified to supply whole series of railway products to China Railway Corporation and related relevant departments. The Company is located in the Econ & Tech Development Zone of Ganzhou City in Jiangxi Province, China. The Company is jointly invested with a total investment of USD 15 million and registered capital of USD 7.6 million, by La Farga Group(Spain), Jiangxi Rare Earth & Rear Metals Tungsten Group and Beijing Prosoar Company. The major products are high-speed railway use copper, copper alloy and other high-tech materials. 15

16 Now the capacity of the JV is 2kt per year for the railway catenary (contact wire, messenger wire, and dropper). Minmetals: Chinese copper import in the upcoming years will decrease gradually Hefei Customs s Director Visits Tongling Nonferrous to further improve trading facility Tongling Nonferrous to deepen reform in blend ownership of the company First lead-free copper semis project settles down in Xinjiang According to Mr. Gu Liangmin, General Manager of trading business unit of Minmetals Nonferrous Metals Co., Ltd, who delivered a speech in Metal Bulletin Shanghai Copper Forum on Nov 2th 214, China will gradually reduced its import of refined copper in the coming years due to the gradual growth of domestic refined copper output and the decrease of demand for financing copper. He indicated that it is quite difficult for the copper financing activities to recover to the level before Qingdao Port bank loan scandal. He also said Chinese nonferrous metals industry is experiencing a fast capacity elimination process as Chinese local government will not pursue the economic expansion as the only target. Mr. Xiaoli, Director of Hefei Cutoms of Anhui Province and companies visited Tongling Nonferrous Metals Group Holding Company Ltd. (Tongling Nonferrous). Mutual parties exchanged ideas on the enterprise s production, import and export, processing trade etc. Delegates from Tongling Nonferrous introduced that Tongling Nonferrous will secure the annual production target by every means and has kept the import and export value of the Group Company grow. Mr. Xiao introduced that Hefei Customs will deep the building of special customs, upgrade its service concept and innovate its service content in order to contribute to the local economy. As the Yangtze River Economic Zone Customs transaction integration reform will be put into practice, Hefei Customs will actively take part in this reform. Tongling Nonferrous will enjoy the improvement of customs clearing efficiency and more convenient trading facility in an open and just import and export environment. According to a source who is familiar with Anhui Tongling Nonferrous Metals Co., Ltd. (Tongling Nonferrous or the Company, 63.SZ), the Company will deepen its reform in the blend ownership of the Company. The Company s majority shareholder, Tongling Nonferrous Metals Group Holding Company Limited (the Group) is considering introducing strategic investors to reduce the percentages of the state-owned shareholding in the Company. Currently the Group is keeping contact with related enterprises including enterprises in Tongling City and enterprises in other industries. But up to now there is no final decision being made. The project of 19ktpa lead-free copper series products was formally settled down in Fukang Industrial Park, which was the first lead-free copper processing project in Xinjiang. The project, with total investment of RMB 12 million, was jointly invested by Xinjiang Taixin New Materials 16

17 Co., Ltd. and Xinjiang Wuxin Copper Co., Ltd.. The project includes 12ktpa lead-free brass casting billet line, 6kt lead-free brass bar line and 1ktpa lead-free brass wire line, with estimated sales income of RMB 1 billion after completion. Taiyuan Chunlei Copper's C1921 copper strip production technology passes evaluation Minmetals signs a US$6 million term loan with 12 foreign banks Longji Copper's 3ktpa copper semis project settles down in Yichuan County Yintan's copper cathode output reaches 865kt in Jan-Oct Taiyuan Jinxi Chunlei Copper Co., Ltd (Taiyuan Chunlei Copper) s C1921 copper strip production technology passed evaluation by experts. C1921 strip series have stable product performance, high precision, good plate shape, and low surface residual stress, which can meet domestic demand and replace the imported similar products. Taiyuan Jinxi Chunlei Copper Co., Ltd was invested in 21 as a project of 5ktpa high precision copper strip by Jiangxi Copper for a purpose of achieving industrial upgrading, which was officially put into operation in October 212. The company s products are widely used in new areas and high-tech field, such as electronics, electronic power, communication, transportation, environment protection and green sources. Jinxi Copper Company has two copper processing companies, which are Shanxi Chunlei Copper Co., Ltd with 5ktpa copper strip capacity and Taiyuan Jinxi Chunlei Copper Co., Ltd with 5ktpa high precision copper strip capacity. China Minmetals Corporation hold US$6 million term loan facility signing ceremony on November 26, 214, with12 foreign banks. China Minmetals Corporation is an international metals and mining corporation committed to providing high-quality services globally. It primarily engages in exploration, mining, smelting, processing and trading for metals and minerals, and is also engaged in finance, real estate, and mining and metallurgic technology, with business scope covering 28 nations and regions in the world. Luoyang Longji Copper Co., Ltd (Longji Copper) s 3ktpa copper and copper alloy wirerod project settled down in Yichuan County, Luoyang City of Henan Province. The project, with total investment of RMB million, mainly supply copper tube, wirerod and etc, products to power plants and for the usage of petroleum, ships and cars. Luoyang Longji Copper Co., Ltd is jointly established by Henan Yilong Science & Technology Industrial Co. Ltd, Chinalco Shanghai Copper Co. Ltd and Luoyang Research and Design Institute for Non-ferrous Metals Processing. The income of copper industry related main business reached RMB 248 billion in Yingtan City of Jiangxi Province from January to October. The output of copper cathode was 865kt and copper semis amounted to 1.9Mt from January to October. Yingtan produced 1.6Mt copper cathode and 2.46Mt copper semis in 213, which accounted for 86% and 6% of that in Jiangxi, and 15% and 17

18 18% of Chinese total. The total capacity of copper cathode in Jiangxi has exceeded 1.2Mt in 213. Luoyang Copper develops ultra-thin and ultra-wide copper plate Nonferrous metal industry in Jiangxi sees a further loss in Jan-Aug Copper & alloy project is settled down in Baoji Investment in nonferrous metal industry slows down Chinalco Luoyang Copper Co., Ltd. (Luoyang Copper) developed copper plate at the size of.2mm*1,mm and has started mass production. Luoyang Copper, acquired by Chinalco in 25, has 18ktpy capacity of copper strips & plates. Newly-built high precision electronic copper strip capacity is 1ktpa. Its annual capacity of nonferrous metals fabrication products is 24ktpa. According to the Commission of Industry and Information Technology of Jiangxi Province, there are 693 above scale companies (with annual revenue above 5 million yuan) engaging in nonferrous metals, with 76 companies facing growing losses from January to August of 214. The losses were expanded by 8.6% YoY. Among them, 253 companies engage in copper, with 19 companies suffering losses. The Northwest Machine Co. Ltd planned to build one copper and copper alloy project in Baoji City of Shaanxi Province. The project, with total investment of RMB 1 billion, was jointly invested by Northwest Machine Co. Ltd and Shanghai Base Trading Co., Ltd. The project was proposed to produce LED car light, Pv cable, high temperature superconducting materials and etc. First stage of the project is expected to produce 4kt copper semis, 15kt oxygen-free copper after completion. The Northwest Machine Co., Ltd. is transformed from the Northwest Machine Factory. It is the leading enterprise of research and manufacture electronic special equipment. It was found in 194 and located in Xi an High-tech Development Area. Investment in the fixed asset of nonferrous metal industry increased by 5.3% YoY from January to August of 214, but with 14.4 percentage points lower than the same period of previous year and with 11.2 percentage points lower than the growth of national investment in fixed assets from January to August of 214. Among them, the growth rates of investment in mining and smelting projects continued to fall, while investment in rolling and processing projects increased continuously. But the growth rate for the period from January to August of 214 experienced a decrease against the same period of 213. Breakdown by investment units, proportion of private investment reached 84.1%. The overall investment structure for the nonferrous metal industry was further optimized. 18

19 Profit of nonferrous metal industry improved The first 14 batches of import quota of used motors reach 7.4Mt in 214 The first 14 batches of approved import quota of copper scrap reach 3.81Mt in 214 The overall profit level was improved in nonferrous metal industry, but there were great difference between different metals. Aluminium smelters suffered the biggest loss. Enterprises engaging in copper, nickel and cobalt, tin, magnesium, antimony, silver, tungsten and molybdenum achieved profit growth. Factors behind the improved profit level for the whole nonferrous metal industry are as the follows: first, a series of mini stimulus and steady growth policies issued by Chinese government had worked; second, prices of most nonferrous metals rose on a monthly basis in July and August. Electricity costs for primary aluminum fell in some regions. The treatment charges of imported copper concentrates recovered. Private enterprises pushed up the whole industrial profit. Besides, management level improved while the growth of administration cost fell back According to the National Center of Solid Waste Management, the Ministry of Environmental Protection, P.R.C., the 14th batch of imported used motors under the approved quota mainly for recycling copper (Customs SN: 7441) was 15.6kt in 214. By now, the first 14 batches of approved import quota of used motors mainly for recycling copper accumulatively reached 7.4Mt in 214. There are 12 authorized customs responsible for the clearance of these batches of used motors mainly for recycling copper. Of them, import volume in Xingang, is the largest, with 72.8kt. According to the National Center of Solid Waste Management, Ministry of Environmental Protection, PRC, the14th batch of import copper waste and scrap (Customs SN: 7449) under the approved quota was 37.3kt. By now, the first 13 batches of approved import quota of copper scraps accumulatively reached 3.81Mt in 214. There are 6 authorized customs responsible for the clearance of these batches of imported copper waste and scrap. Of them, import volume in Ningbo, Zhejiang Province, is the largest, with 11kt. Statistics Chinese Refined Copper Output by Region in Jan-Oct 214 Unit: ton Oct.14 Jan-Oct YoY Jan-Oct % Chinese total 5,196,9 5,823,533 6,838, ,746 6,42, Tianjin 22,23 1,225 6,43 5,343 49, Hebei 123, , ,589 1, , Shanxi 87,785 98,134 88,564 16,59 111,

20 Unit: ton Oct.14 Jan-Oct YoY Jan-Oct % Inner Mongolia 176,35 187, ,436 28,381 23, Liaoning 115,837 61,565 55,176 1,114 15, Heilongjiang 2,925 1, Shanghai 113,781 92,28 87,952 8,219 78, Jiangsu 324, , ,862 24, , Zhejiang 311, , ,167 24, , Anhui 618,529 65,849 1,211, ,293 1,69, Fujian 1,935 89, ,696 19, , Jiangxi 975,156 1,163,723 1,22, ,64 1,12, Shandong 754,587 91, ,672 96, , Henan 112, ,1 171,154 25,99 178, Hubei 352,34 368,173 52,465 5,88 41, Hunan 15,9 21,583 85,127 1,528 19, Guangdong 36,913 96,78 125,49 1,881 1, Guangxi ,953 12,188 Chongqing 1,39 8, Sichuan 4,18 1,944 8,477 1,567 18, Guizhou Yunnan 39, ,184 48,168 46, , Shaanxi 4, Gansu 625,46 78, ,565 92,987 72,1 8.4 Qinghai Ningxia Xinjiang 16,721 19,57 36,233 16,514 62, Jilin 85 Tibet 12 Source: CNIA Chinese Copper Semis Output by Region in October 214 Unit: ton Oct.14 Jan- Oct YoY Jan- Oct % Chinese total 1,281,453 11,539,596 14,987,33 1,58,32 14,359, Beijing 14,89 9,856 8, , Tianjin 128, , ,362 4,28 684, Hebei 73,19 49,29 268,395 9,564 64, Shanxi 62,516 32, 68, Inner Mongolia 264,427 46, ,339 1,699 11, Liaoning 149, , ,33 12,48 2, Jilin 879 Heilongjiang 2, Shanghai 379,3 267,25 295,651 22, , Jiangsu 1,556,153 1,745,264 2,214,8 255,99 2,258,

21 Unit: ton Oct.14 Jan- Oct YoY Jan- Oct % Zhejiang 1,89,659 2,147,524 2,497,16 257,729 2,417, Anhui 1,26,28 1,428,91 1,729, ,958 1,961, Fujian 98, , ,233 13,68 159, Jiangxi 1,564,687 2,88,921 2,641,12 272,163 2,291, Shandong 286, , ,142 7,589 71, Henan 416, , ,464 51, , Hubei 16, ,31 246,592 7, , Hunan 216,979 37,6 451,438 18, , Guangdong 1,379,758 1,25,25 1,549, ,424 1,59, Guangxi 49,9 6,943 86,261 6,187 53, Chongqing 76, ,98 129,761 11,88 138, Sichuan 91,971 28,9 44,348 4,882 48, Guizhou 1,614 4, Yunnan 19,219 72, ,922 18, , Shaanxi 11,857 11,543 9,792 1,39 1, Gansu 135,3 45,266 28,91 15, , Qinghai 44,311 98, ,799 9, , Ningxia , Xinjiang 2,797 1,811 2, , Note: 1. Figures are provided by CNIA. Copper in Concentrate Output Unit: kt in metal content YTD YTD YoY 211 1, , , Feb Mar Apr May Jun Jul 1, Aug 1, Sept 1, Oct 1, Chinese Imports and Exports of Cu Products in October 214 Commodity(Unit: ton) Code/Category Qty in Oct 214 Qty in Jan-Oct 214 YoY Jan-Oct % Import Refined Cu ,772 2,954, Cu ores and conc. 956,312 9,534,

22 Commodity(Unit: ton) Code/Category Qty in Oct 214 Qty in Jan-Oct 214 YoY Jan-Oct % Cu scraps 331,943 3,186, Copper blister/anode 39,139 49, Cu alloy 3,635 39, Cu semis ,329 53, Powder 216 2, Bar, rod, section 5,826 6, Wire 11,49 123, Sheet & strip 11,282 16,6 1.5 Foil 18, , Tube 1,295 14, Other products ,215 24, Export Refined Cu , , Cu scraps Cu alloy Cu semis , , Powder 281 3, Bar, rod, section 753 6, Wire 3,58 27, Sheet & strip 2,552 26, Foil 12, , Tube 2, , Other products ,252 54, Note: 1. Figures are provided by China Customs. 2. All Imports/exports of commodity are in physical weight. Copper Price and Inventories of SHFE and LME Cu Contract Sep 14-Oct 14-Nov Average 66,52 57,348 51,448 49,188 47,935 47,646 SHFE (yuan/t) Cash Month 3-Month High 75,4 63,88 52,6 51,49 49, 48,52 Low 51, 53,43 5,24 48,21 47,17 46,76 Average 65,792 57,318 51,44 48,519 47,399 46,986 High 76,29 63,88 52,77 5,78 48,53 47,66 Low 5,76 52,38 5, 47,29 46,31 45,99 Cu Stocks (kt) LME(US$/t) Average 8,827 7,946 7,196 6,841 6,687 6,638 3-Month High 1,19 8,711 7,416 7,52 6,836 6,773 Low 6,635 7,28 6,938 6,65 6,65 6,342 Cash Month Average 8,823 7,949 7,23 6,872 6,552 6,71 Cu Stocks (kt)

23 Output of Major Copper-using Products and Investment in Power industry Product Unit Annual Annual YoY% Jan-Oct YoY% Auto Mln Power equipments Mln kw AC motor Mln kw Household refrigerator Mln units Household ice-box Mln units Air conditioner Mln units Transformer Mln KVA 1, , , Telecommunication cable Mln double km Power cable Mln Km Power Generation Bln Kwh 4, , , Power investment ** Power source Bln yuan Power grid Bln yuan Total investment Bln yuan Sources: National Bureau of Statistics (NBS); copper semis from CNIA; power investment from China Electricity Council and National Energy Administration. Development and Investment of Chinese Housing Sector Jan-Oct 214 Floor Space Started (mln sq.m.) 1,91 1,773 2,12 1,476 Floor Space Completed (mln sq.m.) , Sales area of Commercial Houses (mln sq.m.) 1,99 1,113 1, Investment Completed (bln yuan) 6,174 7,18 8,61 7,722 Copper Scrap Price on Chinese Spot Market in November 214 Tax excluded Unit:yuan/t High Average low #1 Cu 97% 43,65 43,45 42,95 #2 Cu 94~95% 41,25 41,5 4,55 Used transformer (Cu 94~95%) 4,85 4,85 4,35 Brass (Cu 59~6%) 3,45 3,23 29,95 Used motor (Cu 8%) 5.5 5,25 4,95 Notes: 1.the data is reported by Guangzhou Nanhai Nonferrous Metals Spot Market (Guangzhou), located in Guangdong Province, South China. 23

24 Quotation of Refined Copper by Producers & Traders Company( Unite: RMB per ton) Early Oct. Mid Oct. Late Oct. Early Nov. Mid Nov. Late Nov. North China Trading (Tianjin) Company 48,8 48, 48,9 48,7 48,3 47,2 Zhongtiaoshan Nonferrous Metals Company Guangdong Nanchu Warehousing Management Company Shuikoushan Nonerrous Metals Group Chendu Smelting Company 49,5 49, 49, 49, 49, 48, , 47,8 48,5 48,5 48, 47,1 48,515 47,7 48,42 48,9 48,4 47,4 Daye Nonferrous Metals Company Baiyin Nonferrous Metals Company China Metal Market Order Form Online Information ( Industry Policy Economic Reports Base Metals US$6/y US$6/y US$3,/y, monthly reports of Copper, Nickel&Stainless Precious Metals Minor Metals Rare Earth Stainless Steel & Raw Materials Steel, Alumina & Aluminum, Lead & Zinc complimentary US$1,5/y, monthly report, complimentary US$2,5/y, monthly report, complimentary US$1,/y, monthly report, complimentary US$1,5/y, monthly report, complimentary Note: 1. The price is for 1 access to the website. For 2 accesses in the same company, 2% discount is provided; and for 3 accesses, 3% discount is provided. 2. One access can only be used by one user, otherwise it will become invalid. Reports (PDF) & Data Package (Excel) 24

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