The business index of Chinese non-ferrous industry in the second half of 2008 continuously declined 65.35 percent from October 15, 2007 to July 15, 2008.

     The profitability of non-ferrous industry experienced production cost increase due to energy price hikes and advancing pricing system reforms on domestic energy products.

     China's coal and product oil prices are expected to see substantial advance taking into consideration of easing control from the government and wide price spread between domestic and international markets.

     The government rolled out industry access policies on energy consumption and differential electricity price system in a bid to curb the excessive expansion of nonferrous enterprises and encourage energy conservation.

     China's nonferrous enterprises have to pay additional money to mine resources, meet stricter standards on waste discharges, and reduce pollution.

     Plus, public-listed companies from China's non-ferrous industry peaked in operating performance in the second half of 2007 after years of fast development. It won't be soon to see dual robust growth in output and product prices with the industry maturing.

     Now, China with the population accounting for 22 percent of the world takes about 30 percent shares in global non-ferrous production and consumption.

     Haitong Securities forecasted that China's non-ferrous production would record 10 percent or less of averaged annual growth from 2006 to 2010 in company with ebbing consumption growth.

     China's non-ferrous industry may suffer from slow-down of the global economy, lower-than-expected domestic demand as well as possible appreciation of U.S. dollars in the second half, according to Hong Yuan Securities.

     However, tin, molybdenum, rare earth and other sectors receive bright outlook forecasts on the basis of rareness, steady global demand growth and measured supplies.

     Tin prices posted over 50 percent increase since the beginning of 2008 with China and Indonesia producing 73.5 percent of world tin output, according to Great Wall Securities.

     Still, Chinese tin output dropped 13 percent and China turned into a net importer of refined tin and tin alloy in the first quarter of 2008 in addition to tightening export policies from Indonesia.

     It is predicted that China's export of rare earth will decrease by five percent due to robust domestic demand, governmental quota system on export and mining. China produced 96.77 percent of the world's rare earth output in 2007 while taking about 50 percent share global rare earth consumption.

     China's non-ferrous product prices also receive temporary support from additional demand brought by heavy snow, earthquake in Sichuan area, tight power supply and depreciation of U.S. dollars.

     May 12th earthquake in Sichuan Province has caused aluminum, lead and zinc enterprises to suffer huge losses. It will take months to restore partial production capacity in aluminum, according to an expert, who drafts rebuilding schemes.