The first half of 2015, the aluminum industry, supply and demand intensified

According to June 2015 by the non-ferrous metals industry climate index showed that the overall non-ferrous industry is located in the smooth operation of the situation, and there are signs of sustained stabilization. Since 2015, the climate index climbed to 55.7 month by month, the overall rebound to the "normal" region; leading index also maintained an upward trend. Combined with the non-ferrous metals industry climate index, from the first half of 2015, the operation of the aluminum industry, the overall production of smooth running, and aluminum smelting industry profitability, aluminum rolling processing industry to maintain profitability, but aluminum smelting investment rebounded, Price volatility down. Can be seen, the aluminum industry supply pressure is not reduced, the short term substantial turn for the better the pressure still exists.

First, the first half of 2015 operating characteristics of the industry

The first half of 2015, by the domestic economic growth, weak demand, excess capacity, resource constraints and tighten the impact of environmental factors, although the overall aluminum industry to maintain a smooth running trend, but the recovery of the main economic indicators are still weak, down pressure is still Big. Mainly in:

(A) production hit record highs, increased supply pressure

May 2015, the domestic electrolytic aluminum production of 2.67 million tons, a record monthly production of new high; 1 May cumulative production of 12.82 million tons, an increase of 10.3%, an increase over the same period last year increased by 2.3 percentage points. In addition, the aluminum smelting industry (including electrolytic aluminum, alumina, recycled aluminum) to complete the fixed asset investment in 2013, 2014, after two consecutive years of decline, in 2015 1 to 5 months of recovery, up 11.6% yuan. Since 2012, investment in aluminum smelting shown in Figure 1. The above data show that since 2015, the domestic electrolytic aluminum enterprises to increase production rate is greater than the cut, the supply pressure to increase, resolve the contradiction of excess capacity is difficult to eliminate short-term.

(B) the industrial layout tends to be reasonable, energy structure optimization

From the industrial layout, electrolytic aluminum industry layout adjustment effect is most significant. From January to May 2015, the output of electrolytic aluminum in the western region was 7.6 million tons, accounting for 59.3% of the total. The operating rate of most electrolytic aluminum enterprises in the western region reached over 90%. Alumina production capacity around the bauxite-rich areas and the port area distribution. 2015 1 May, alumina production 23.41 million tons, an increase of 13.5%. Among them, Shandong, Henan, Shanxi ranked the top three. Aluminum production capacity around the consumer and raw material supply to the layout. From January to May 2015, aluminum output was 19.9 million tons, an increase of 10.7%. Among them, Shandong around its rich aluminum liquid resources layout of the many aluminum processing plants, aluminum production ranked first in the country.

From the energy structure, electrolytic aluminum enterprises, including electricity network, self-owned electricity, direct purchase of electricity, local area network and other modes. Table 1 shows the electricity price of various power consumption models. At present, with its own power plant electrolytic aluminum production in the country accounted for more than 70%, especially in Shandong, Xinjiang, aluminum companies actively promote the construction of local area networks, electricity costs as low as 0.2 yuan / kWh. At the same time, coal prices fell, Ningxia and other places over the net fee reduction, are conducive to reducing electricity costs.

(C) price shocks down, pick-up power shortage

As the domestic electrolytic aluminum production continued to expand, supply pressure, and poor performance of domestic demand, aluminum prices continue to decline, the spot price of aluminum to maintain premium status. In the first half of 2015, the average price of Shanghai aluminum futures for three months to 13012 yuan / ton, down 4.3%; spot price of 12,906 yuan / ton, down 4.1%. Among them, the Shanghai aluminum spot price fell below 12,500 yuan / ton, the highest price in the year 13,455 yuan / ton down 7.6%. Almost 20 years, the domestic aluminum price trend shown in Figure 2. The current aluminum prices in the past 20 years, the history of low, most of the domestic electrolytic aluminum enterprises have entered the cost price upside down, and the downward pressure is still large.

(D) aluminum smelting to achieve profitability, aluminum processing continued profitability

In the case of cost and price decline, aluminum smelting industry benefits for the first time since 2013 to achieve profitability, the cumulative profit of 700 million yuan, a loss of 8 billion yuan a year earlier, the loss has narrowed, and inter-enterprise Profit level there is a big difference. As the industry surplus situation has not been improved, the price is still falling, or even below the industry average cost line, so although the smelting industry efficiency has improved, but the overall basis for the weak, aluminum smelting industry downward pressure still exist. Aluminum rolling processing industry is operating better, to maintain profitability, in 2015 1-5 months to achieve profits of 19.6 billion yuan, an increase of 20%.

(E) import and export trade structure in line with the industrial development of the base

The development of China's electrolytic aluminum based on domestic demand, import and export volume was essentially flat. January to May 2015, non-alloy aluminum net imports of 30,000 tons, accounting for the proportion of domestic production of electrolytic aluminum is only 0.2%.

Alumina imports and exports are mainly affected by spreads at home and abroad. In the first five months of 2015, the price of alumina at home and abroad all declined, while the price of imported alumina dropped by more than US $ 30 / ton, but still significantly smaller than that of domestically produced alumina by RMB400 / ton. %, To 1.59 million tons. In the first five months of 2015, bauxite imports reached 18.61 million tons, up 12.2% year on year, and Malaysia replaced Indonesia as one of the major sources of bauxite, providing protection for alumina production in Shandong and other regions.

Aluminum exports increased significantly, but exports accounted for the proportion of production has been maintained at about 10%, dependent on foreign markets is limited. January to May 2015, aluminum exports 1.84 million tons, an increase of 46%, mainly due to aluminum strip, profiles and other high proportion of exports increased the number of species larger.

(F) smelting industry, the world's leading technology and equipment, processing industry is uneven

Compared with foreign countries, China's aluminum smelting enterprises to bear the energy costs more than 10%. Therefore, enterprises continue to improve technology and improve the level of equipment and other measures to improve efficiency and reduce energy consumption, smelting technology and equipment level in the global leading level. At present, 300kA and above slot electrolytic aluminum production accounted for more than 70%; 400kA and above accounted for more than 50%; 500kA groove has been widely used; 600kA groove has also been industrialized production. At the same time, energy consumption indicators are continuously optimized. In recent years, the main technical and economic indicators of aluminum smelting industry trends shown in Figure 3. The first five months of 2015 total, aluminum ingot AC power consumption will reach 13,576 kWh / ton, down 48 kWh / ton.

Aluminum processing industry equipment level, the main technical and economic indicators and product quality and grade continued to improve and optimize, but with the international advanced level there is still a wide gap, and the domestic enterprises are advanced and backward co-exist.

Second, the industry situation in the second half of 2015 pre-sentence

The face of China's economy into the moderate growth of the "new normal" and the aluminum industry has fully exposed the deep-seated contradictions, combined with aluminum industry development in the face of excess capacity, consumption growth down, lack of core competitiveness and other issues, The second half of the aluminum industry is expected to run as follows:

First, alumina, aluminum, aluminum capacity, production will continue to maintain steady growth, new capacity is mainly distributed in Xinjiang, Inner Mongolia, Shandong and other resources and energy-rich areas. Electrolytic aluminum production capacity has not been significantly improved, and the supply pressure increases. In the first half of 2015, despite the shutdown of electrolytic aluminum production capacity of around 500,000 tons / year, there are still more than 1 million tons of new production capacity put into production. The capacity of the region with energy and resource advantages is still expanding. In view of the high cost of electrolytic aluminum production out difficult, backward ability has been almost completely eliminated, resolve excess capacity long way to go. But by the Government of electrolytic aluminum and other industries overcapacity investment in the strict control and market factors, the new capacity will be narrowed. In addition, aluminum in the low-end investment also showed a phenomenon of overheating, so that the industry profit margins are affected.

Second, by the supply pressure, consumption growth and commodity prices down the impact of aluminum prices will remain at the cost line up and down, showing low volatility. At the same time, "the CPC Central Committee and State Council on further deepening the reform of the power system a number of opinions" for the introduction of aluminum industry development has important guiding significance, coal and other raw material prices continue to fall will also help enterprises to effectively control costs. But the overall economic efficiency of the industry to improve the foundation is still weak, the overall pressure for the better in the short term is still large.

Third, expand the application will become an important long-term mechanism to resolve excess capacity. China Nonferrous Metals Industry Association in the transportation, construction, electricity and other aluminum applications focus areas to promote aluminum applications, and has expanded the aluminum trailer, aluminum alloy construction templates, aluminum alloy cables and other products on the application of positive progress. Drawing on foreign experience, the above consumption is still driven by the policy guidance and support. For example, to improve fuel consumption, carbon dioxide emissions and other standards; to strengthen the overloading and other transportation management and law enforcement efforts. But only by virtue of market means to expand the application in the short term to a certain extent, to eliminate the decline in economic growth caused by the impact of consumption growth down, but for the effective solution of excess capacity to promote the sustained and healthy development of aluminum industry is limited and the relative process slow.

In summary, the second half of 2015, aluminum smelting industry trends will not be significantly improved, aluminum rolling processing industry will continue to maintain smooth operation.

(Author: Department of Light Industry, China Nonferrous Metals Industry Association