On June 10, 2020, 2020 (the second session) "2020 China Metal Industry Chain Summit" was solemnly held in Foshan poly intercontinental hotel. At the meeting, the vice president of China Nonferrous Metals Industry Association, Wen Jun, delivered a keynote speech entitled "aluminum processing in China after the epidemic".

Wen Xianjun, vice president of China Nonferrous Metals Association

President Wen first pointed out that China's aluminum industry has withstood the test of the epidemic situation. In the first four months of 2020, the output of alumina was 23 million tons, down 6.1% year on year. The daily output in April was 202000 tons, a year-on-year decrease of 3.3% and a month on month increase of 6.6%. In the first four months, the output of electrolytic aluminum was 11.83 million tons, up 2.4% year on year. The daily output in April was 99000 tons, up 1.8% year-on-year and 3.3% month on month. In the first four months, the output of aluminum products was 15.98 million tons, with a year-on-year increase of 1.4%. The daily output in April was 176000 tons, up 33.9% year-on-year and 18.3% month on month. In the first four months of 2020, the total export volume of UN forged aluminum (non alloy aluminum and aluminum alloy) was 84000 tons, a year-on-year decrease of 62.9%; the total import volume was 287000 tons, with a year-on-year increase of 393.8%. The total export volume of aluminum products (aluminum powder, aluminum bar profile, aluminum wire, aluminum plate and strip, aluminum foil, aluminum tube, aluminum pipe accessories) was 1.545 million tons, a year-on-year decrease of 9.7%; the total import volume was 122000 tons, with a year-on-year increase of 17.2%. The total export volume of aluminum scrap and scrap was 0300 tons, with a year-on-year decrease of 27.3%; the total import volume was 270000 tons, with a year-on-year decrease of 44.1%. The total export volume of alumina was 63000 tons, with a year-on-year decrease of 63.1%; the total import volume was 1248000 tons, an increase of 447.21%. The total export volume of bauxite sand and concentrate was 15000 tons, down 46.4% year-on-year; the total import volume was 38.3 million tons, up 7.5% year-on-year. At the same time, the Nonferrous Metals Association also calculated that 2811 Aluminum Industrial Enterprises above Designated Size achieved a profit of 3.7 billion yuan from January to April, a year-on-year decrease of 33.5%. Among them, aluminum mining enterprises suffered a loss of 20 million yuan, with a year-on-year decrease of 170 million yuan; aluminum smelting enterprises (including alumina, raw aluminum and recycled aluminum enterprises) achieved a profit of 640 million yuan, a year-on-year increase of 47.3%, but a loss of 810 million yuan in April; aluminum processing enterprises achieved a profit of 3.07 billion yuan, a year-on-year decrease of 38.2%.

Secondly, President Wen pointed out that due to the particularity of aluminum smelting process, the epidemic situation has basically no impact on China's aluminum smelting production, and the output continues to grow, and the impact of the epidemic on foreign aluminum smelting is also small; aluminum processing enterprises resume production very quickly after the epidemic, and the output in January April has increased significantly year-on-year and April month on month, driving the rapid growth of domestic raw aluminum consumption; domestic aluminum dominant inventory decreased During the epidemic period, the EU (February 14) and GCC (April 29) launched anti-dumping investigations on aluminum extrusions and aluminum sheets and strips.

Under the epidemic situation, is the aluminum industry chain really so good? In the first five months, the output growth, consumption growth and aluminum price of the aluminum industry were good, the industry profit increased significantly year on year, most enterprises made profits, and the situation is very good! Affected by the epidemic situation, the growth rate of investment in real estate development in China has declined sharply, showing a negative growth; since January 2020, the growth rate of sales area and sales volume of commercial housing in China has dropped sharply, and the growth rate from January to April continues to be negative; the completion of automobile production in the first four months of 2020, the total production volume from January to April is 5.596 million units, with a year-on-year cumulative growth of - 33.4%; among them, the number of passenger cars has increased by - 33.4% The total production volume was 4.291 million, with a year-on-year cumulative growth of - 37.8%; the total production of commercial vehicles was 1.304 million, with a year-on-year cumulative growth of - 13.4%; the total production of new energy vehicles was 205000, with a year-on-year cumulative growth of - 44.8%. Power investment was also affected by the epidemic situation. From January to April, the investment in power grid projects nationwide was 67 billion yuan, down 16.5% year on year. Construction, transportation and electric power, which account for two-thirds of China's total aluminum consumption, all saw a sharp decline in demand from January to April. Although new consumption areas all have good performance, they still account for a limited proportion. Exports are also declining. From January to may, the exports of aluminum and aluminum products decreased by 18.7% year on year, of which the exports in May decreased by 28.6% year on year, showing an accelerated trend.

Where has the increased consumption gone? There is only one answer: overdraft. There are various news and rumors (such as storage, export tariff, reduction and replacement) and some human factors. The superposition of the above factors leads to the rise of domestic aluminum prices, resulting in: the import of non forged and rolled aluminum; the reduction and stop of high cost aluminum plants; the acceleration of new production capacity; serious inversion of aluminum prices at home and abroad, and the increase of aluminum export costs.

Finally, President Wen expressed his outlook on the future development of the aluminum industry. In the short term, the domestic original aluminum production maintained growth, the newly built and put into production capacity accelerated to release, the import increased, and the recycled aluminum recovered growth, Domestic oversupply, destocking inflection point is likely to appear in the next few months; the price difference between domestic and foreign countries will be narrowed, and the rapid growth momentum of raw aluminum import will be curbed; domestic consumption will increase slightly, and the decline rate of aluminum export is expected to be 10-15%; the aluminum price is expected to maintain between the industry's meager profit and the average cash cost, and the possibility of loss in the whole industry is not likely. In the long run, the overall development pattern of China's aluminum industry remains unchanged, the supply side structural reform will continue to advance, and the transformation and upgrading of consumption will be accelerated; the epidemic situation will aggravate international trade friction, the trade order will be more complex, trade remedy cases will be further increased, and the politicization tendency of trade friction will be more obvious; the trend of global economic integration cannot be reversed, and the international market is rigid to China's aluminum products The demand will last for a long time; the most obvious advantage of China's aluminum industry will change from a complete industrial chain to a technology led one in the future; the pace of merger and reorganization among domestic enterprises will be accelerated, and international capacity cooperation will gradually extend from upstream to downstream.

In short, the global epidemic is not expected to end in a short time. Various countries and regions are introducing economic assistance policies. Appropriate stimulus plays a great role in economic recovery. However, if the stimulus is excessive, it will overdraft the future and bring hidden dangers to the healthy development of the global economy. The foundation for the healthy development of China's aluminum industry (electrolytic aluminum production ceiling, complete industrial chain, etc.) is very solid, and there is a strong domestic market demand. As long as we keep our determination, do our own things well, adhere to high-quality development, green development, and sustainable development, we will certainly realize the dream of China's aluminum industry, the world's aluminum industry power!

Source: my colored net