Because the price of nonferrous metals moves in unison with larger world business cycles, any significant blip can have an impact on them. When the world economy recovered from the Asian financial crisis a decade ago, nonferrous metal prices also reached their peak.

During the recent drops in copper and aluminum prices on the international market, the role of speculators should not be ruled out, Zhao said. In China, when the nonferrous metal market was booming, speculators were not looking on with folded arms. Investors, large or small, state-owned or private, wanted a slice of this big pie. Few of them were committed to real mining, but keen on buying and selling exploitation and mining rights, said Wang Jun, who used to prospect for mining companies.

Despite the industry's woes, the reckless expansion of nonferrous metal processing plants and the construction work on such projects also has contributed to its current problem. According to Zeng Shaojin, Vice Director of the China Mining Association, the production capacity of aluminum oxide doubled or even tripled in recent two years, which caused the oversupply and price plunge.

"When the prospecting frenzy began to ebb, the fundamental market principle of demand and supply kicked in," Zeng said. "In this sense, the convergence of the international financial crisis and domestic oversupply fueled the current sluggish nonferrous industry."

Painful transformation

All this seems to indicate that China's nonferrous industry has ended its period of rapid growth and entered one of adjustments, said Zhao.

"We are going through winter," some insiders said at the recent mining expo, half jokingly, half seriously, referring to the fact that the reductions in output that have pushed up metal prices have proved ineffective in stopping the downturn in the domestic market.

But the nonferrous metal industry is not dead yet. On October 29, the China Nonferrous Metal Industry Association suggested a six-point package to help aluminum makers out of their predicament. The package includes increasing export tax rebates and state reserves of aluminum ingots, issuing more loans to the aluminum industry, putting in place a bonus mechanism for closing down backward facilities and encouraging electro-metallurgical integration to ensure power supplies. All these measures call for policy support from government.

But some doubt whether the government will back them.

"I don't think the government will issue these supportive policies," said Zhang Mei, a researcher at the Information Center of the Ministry of Land and Resources. "Taking into consideration the balance and fairness of different industries, supportive policies exclusively for the aluminum industry are not promising."

Will the government's 4-trillion-yuan ($586-billion) stimulus package have a positive impact on the nonferrous metal industry? The answer is yes, Zhang said, because nonferrous metals are essential materials for economic development, and the stimulus plan would boost demand for them. But he also said the government would allocate the funds primarily to railway and public housing construction, whose demands for nonferrous metals are limited and indirect.

"What's more, the government has indicated that the exports from highly polluting and energy-consuming industries are not on the list of those it encourages and will support in the future," Zhang said. "This makes it even harder for the nonferrous metal industry to ask the government for preferential policies." In July 2007, China cancelled tax rebates of 8-11 percent on exports of rods, bars, extrusions, profiles and wires made of primary aluminum or aluminum alloy because aluminum-related production consumed massive amounts of electricity and had a low output value.

"The whole nonferrous metal industry is going through a reshuffle," Xiao of NKZC said. "Those less profitable enterprises might close down. We saw a lot of excellent investment projects at the mining expo, but the right time has not come yet. The market has not reached the bottom."

More companies are looking to strengthen their internal management. Yunnan Copper Co. Ltd., the third largest copper maker in China, sent its staff an open letter on October 29, saying that it would control costs by improving management, optimizing its organizational structure and tightening the budget in response to the global financial crisis. It called on employees to repair broken-down machinery and not waste a single screw.

The current situation was also an optimal time to set up large nonferrous industrial groups and upgrade the degree of industrial concentration, said Li Su, Chairman of H&J Vanguard Management Consulting Co. Ltd. With some companies undervalued or going under in the current sluggish market, now was a good time for stronger companies to buy or take over weaker ones, Li said. In October, for instance, Chinalco bought a controlling stake in Yunnan Copper, the country's biggest metal acquisition this year.

"This demonstrates Chinalco's ambition to be a big fish in China's nonferrous metal industry," Zhang said. Likewise, China Minmetals Corp. acquired a 29.9-percent holding in Shanxi Guanlu Co.

"The present difficulty should be observed in two lights," Zeng said, referring to the industry's predicament. "It is a hard time, yes, it is very true. But it also implies opportunities. Speculation was squeezed out, [and] the price has had a rational return to its value, which are all good for the long-term healthy development of China's nonferrous industry."