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Inventory of aluminum industry development hotspots

  • Author:Dong Xing
  • Source:Dong Xing
  • Release on:2018-07-05
With the supply-side structural reforms focusing on de-capacity, de-stocking, deleveraging, cost reduction, and short-boarding, officially kicked off, on October 18, 2017, General Secretary Xi Jinping re-emphasized in the report of the 19th National Congress. It is necessary to deepen the structural reform of the supply side, implement the new development concept, and build a modern economic system.

In the past year, it was an extraordinary year for the aluminum industry. Regardless of the price trend, the increasing national policy, or the high-end application field, the aluminum industry is implementing the national supply-side structural reform and Under the goal of building a strong non-ferrous metal country, we will pay close attention to innovation and development, actively promote transformation, adjust structure, promote transformation, and demand-oriented, expand aluminum applications, achieve overcapacity, promote international capacity cooperation, and deal with trade frictions. A number of achievements have effectively promoted the industry to improve quality and efficiency, transformation and upgrading, foster new development momentum, enhance international competitiveness, and promote the healthy development of the industry.

Resolving excess capacity 10 million tons production capacity withdraw from the stage

What is the most interesting hot spot in the aluminum industry in 2017? De-capacity is definitely the highlight of this anniversary of the aluminum supply-side structural reform.

Since 2013, the problem of overcapacity in the aluminum industry has become an incurable disease in the industry. It has not declined, and the vicious competition in the industry has intensified. As the “barren land” in overcapacity warfare, there are many illegal construction projects in the electrolytic aluminum industry. It has become a “stumbling block” that affects the healthy development of the industry.

Since 2017, with the country's efforts to harvest coal and steel, the electrolytic aluminum has become a major issue, and efforts have been made to strengthen the strict management. The country seems to be eager to leave this "hard bone" that has been retained for many years. .

In February 2017, a policy of sensationalism in several high-energy-consuming industries was announced. The sixteen ministries and commissions of the country jointly issued "Guiding Opinions on Using Integrated Standards to Promote the Exit of Outdated Production Capacity in Accordance with the Regulations" and "Opinions" with unprecedented intensity. It is clearly pointed out that in the steel, coal, electrolytic aluminum and other industries as the focus, a number of energy consumption, environmental protection, safety, technology can not meet the standards and production of unqualified products or eliminated production capacity, according to the law, shut down according to regulations. Immediately afterwards, in April, the four ministries and commissions jointly issued a notice on the rectification plan for the special action plan for the rectification of illegal and illegal projects in the electrolytic aluminum industry, which will be clear for 2013. Since the beginning of May, the newly-built electrolytic aluminum production capacity has completely completed the cleanup and rectification of electrolytic aluminum violations.

A national “action” around the clean-up and rectification of illegal and illegal electrolytic aluminum projects was opened: the Ministry of Water Resources introduced new regulations to strictly control the use of over-capacity projects such as electrolytic aluminum; the National Development and Reform Commission and the National Energy Administration supervised the self-sufficient power plants constructed in violation of laws and regulations. Comprehensively clean up the government funds and surcharges that are not paid by the self-supplied power plants; the Ministry of Industry and Information Technology issued supporting documents on the inter-provincial capacity replacement of electrolytic aluminum in the enterprise group; the major aluminum provinces such as Shandong, Henan and Xinjiang have introduced strong plans and related policies. Strictly control the new capacity of electrolytic aluminum, and strictly check the illegal production capacity...

Thanks to a series of strict control of production capacity, the electrolytic aluminum industry has been baptized by a body and mind. The industry, which has been synonymous with “expansion”, has been labeled as a “strong calming agent”. It is understood that since 2017, China has about 5 million tons of electrolytic aluminum built capacity to stop production, and another 5 million tons of capacity under construction to stop construction, involving a total of nearly 10 million tons of illegal aluminum electrolytic capacity, effectively curbing the new electrolytic aluminum The trend of increasing production capacity is too fast.

In fact, the reasons for the ability to achieve nearly 10 million tons of capacity to exit the market are nothing more than three points: policy guidance, promotion by local governments and industry associations, and cooperation with aluminum industry companies. For 2017, the focus is on policy guidance. After the implementation of the policy, the industry has achieved significant results. In November 2017, the output of primary aluminum was 2.35 million tons, down 16.8% from the same period of last year. It fell for five consecutive months, and the output fell to the lowest level since February 2015. The price of aluminum was in 2017. In the past six months, the industry as a whole has improved. In the first 11 months, the profit of the aluminum smelting industry reached 34.27 billion yuan, a year-on-year increase of 55.4%.

In the first half of 2017, aluminum prices were improving, but in the second half of the year, people could not help but be surprised. According to Shanghai March futures, the aluminum price reached a maximum of 17,000 yuan/ton in September 2017, and then began to fall. By December 2017, the aluminum price fell to a minimum of 14,000 yuan/ton. The analysis reasoned that although the aluminum industry production inflection point, but in 2017 to December 2017, aluminum inventory has been around 16 million tons, high, the market forecast of the inventory inflection point did not appear as expected; secondly, Beijing-Tianjin-Hebei and surrounding areas in the autumn and winter of 2017-2018, the comprehensive action plan for air pollution comprehensive management, namely "2+26" began to implement, but the implementation of the situation has a certain gap with the expected results.

Thereafter, on December 26, 2017, the Central Third Environmental Protection Inspector Group gave feedback to the Shandong Provincial Party Committee and the provincial government, and once again gave the electrolytic aluminum industry a price of “strong heart”, and the aluminum price returned to 1.5. About 10,000 yuan / ton.

Therefore, China's electrolytic aluminum industry still has a long way to go to resolve excess capacity. In 2018, it is necessary to continue to resolutely control new capacity to avoid the blind expansion of the industry.