The effect of exchange rate adjustment on the overall impact of the metal smelting industry is neutral

According to Zhou Dejun, an analyst in Xinjiang Securities, the overall impact of RMB appreciation on the steel industry is neutral, with little impact on exports and increasing import pressure. The impact on the non-ferrous metals industry is that large metals have good bias, small metals have negative profit, and precious metals are neutral. Iron and steel industry: three major impacts in the short-term First, the appreciation of the renminbi will help steel companies reduce costs. It is expected that China's ore imports in 2005 will be 200 million tons, which will require 112 billion yuan. A 2% appreciation can save 2.2 billion yuan in cost. The cost per ton of steel will therefore drop by 7 yuan. Although the cost reduction is limited, it will import iron ore. The more dependent steel mills still constitute good. Second, import pressure has increased. China imports more than 30 million tons of steel every year, of which more than 70% are cold plates, galvanized plates, etc., which cannot be produced domestically or have insufficient capacity. In the current situation of shrinking market demand and weak consumption, the increase in imports caused by the appreciation of the local currency will increase the price pressure of cold-rolled products. According to the analysis of imported 1MM cold-rolled sheet, the EU market price was 480 Euro/ton on July 20th, US market price was 560 USD/ton on the US market, CIS and Card Steel offered 540 USD/ton to China for export, plus A variety of taxes and fees, can be roughly calculated the cost of imported European and American cold plate in the 5943 yuan RMB / ton, imported CIS cold plate costs 5738 yuan / ton. The domestic July 22 cold plate 1.0*1250*2500m/mST12 transaction price is 5775 yuan/ton. A 2% appreciation of the renminbi will reduce the import cost of cold rolled products by RMB 115/t. Third, the negative impact of exports is relatively small. At present, the sharp decline in export tax rebates and the control of exports of low-end steel have caused most manufacturers to shift their exports to the domestic market. Therefore, the company’s export sales revenue will not be affected by the appreciation of the renminbi. In 2004, China's total exports of steel, billet, and ferroalloy were US$13.3 billion. Even if the total export volume in 2005 maintained its level in 2004, an appreciation of 2% will only reduce domestic steel industry revenue by 2.1 billion yuan. The major export companies of listed companies are Angang, Baosteel, Hualing and Wuhan Iron and Steel. In the medium to long term, although "the transfer of surplus domestic steel production capacity through international markets" is the direction of government efforts in 2004, due to the continued appreciation of the renminbi may be a medium-to-long term trend, the increase in domestic steel imports and export reduction will be inevitable. This will create further pressure on the already surplus steel industry. Of course, the degree of pressure will depend on the magnitude and timing of the future appreciation of the renminbi. Non-ferrous metals: limited impact on short-term export-oriented companies will not be affected in the short term. In general, domestic non-ferrous metals prices that are fully internationalized will fall by 2% due to a 2% appreciation of the renminbi. However, although domestic Shanghai Metals have certain influence on LME and COMEX metals, the trend of international copper prices driven by capital is firmer. The slight appreciation of RMB has little impact on the continued maintenance of nonferrous metal prices by international capital, so the short-term export-oriented colored The impact of metal companies will not be great. Good for imported raw materials. As a non-ferrous metal producing country and a resource-poor country, China needs to import a large amount of raw materials while exporting some processed products. The appreciation of the renminbi is good for nonferrous metal smelters that need to import large quantities of non-ferrous metal minerals. They can reduce production costs to some extent, but the impact on different varieties and companies will be different. Electrolytic aluminum has digested adverse effects in advance. It is worth mentioning that recently, the new policy will terminate the preferential treatment of alumina and ferroalloy processing trade, and these two products will no longer enjoy 8% of export tax rebates and 17% VAT exemption. This policy will lead to a significant drop in exports of electrolytic aluminum. Rumors since April have caused electrolytic aluminum companies to reduce their alumina processing trade and product exports. The negative impact of the appreciation of the renminbi on electrolytic aluminum exporters has been obscured by the policy.