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Aluminum price "lying flat" leader "rise": China's aluminum industry to expand energy consumption and reduce energy consumption.

Release time:

2024-03-02 09:51

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Global commodity prices overall weak, aluminum prices are also "flat" for nearly a year. Recently, a reporter from the Financial Association visited and investigated Chinalco (601600.SH) and learned that as an aluminum giant, in the competition for electrolytic aluminum stock, it will further increase the market share of electrolytic aluminum through the implementation of surplus electrolytic aluminum indicators, resource integration and overseas layout. Through technological research and development, reducing the energy consumption of electrolytic cells, and transferring to low-cost areas, cost reduction and efficiency increase are realized.

contrarian expansion and integration

The downward phase of the industry may also be the best period for M & A expansion for leading companies. In a year when aluminum prices "lie flat", Chinalco has accelerated its expansion.

Aluminum Corporation of China is the world's largest supplier of alumina, fine alumina, high-purity aluminum and aluminum anodes. After last year's "consolidated" of Yunlu (000807.SZ), electrolytic aluminum production capacity also ranked first in the world.

In January this year, Guizhou Huaren, a subsidiary of Chinalco, received 100000 tons of electrolytic aluminum from Nanshan Aluminum (60021.SH) for 0.66 billion yuan.

It is reported that electrolytic aluminum is a high energy-consuming industry, and my country strictly limits the scale of new production capacity. After the National Development and Reform Commission issued relevant policies in 2017, the domestic electrolytic aluminum production capacity ceiling was locked at about 45 million tons, so electrolytic aluminum indicators appear to be relatively scarce.

Company executives told Caixin News Agency reporters that as of the first quarter, the company's electrolytic aluminum equity production capacity of 7.3503 million tons, accounting for about 17% of the country's total production capacity. In the future, the company plans to "continue to increase the market share of electrolytic aluminum" through three aspects: first, to build factories in areas with energy advantages with the original surplus electrolytic aluminum index; second, to give full play to the professional resource integration function of state-owned central enterprises, and to integrate some electrolytic aluminum enterprises that have not formed economic scale or poor management; third, with the further development of overseas bauxite and alumina resources, in the future, some supporting electrolytic aluminum production capacity will be built in foreign resource-rich areas.

On the other hand, the company's confidence in expansion may also come from optimistic expectations for the future of the industry. Company related sources said: "Recently, the circulation of spot tight water is more obvious, for the future of aluminum prices are more optimistic about the individual. And subject to the electrolytic aluminum capacity ceiling, the future of the industry can continue to profit also provides a certain guarantee."

Although the price of aluminum in the past year in the "lying flat" state, but with the decline of the cost center, the overall profit level of electrolytic aluminum has been improved. Founder Securities reported on June 20 that the price of electrolytic aluminum thermal coal fell and the cost of thermal power fell. As of May 31, the average SMM electricity price was reduced to 0.432 yuan/kwh. In addition, alumina, pre-baked anode prices are weakened to varying degrees, the cost end further reduced, electrolytic aluminum profit expansion.

A person from a listed aluminum company told the Caixin News Agency that although the cost has fallen significantly, the price center of electrolytic aluminum has remained stable at around 18500 yuan/ton in the past year. "Our industry has basically reached an agreement on the current aluminum price near the bottom., Even if the subsequent decline, the space is limited."

Cost driven pressure drop energy consumption

Electrolytic aluminum is a high energy-consuming industry with a high proportion of electricity costs. According to Mysteel data, as of May, among the main costs of electrolytic aluminum, electricity costs accounted for 36%, alumina costs accounted for 35%, and anode costs accounted for 15%.

As for how to reduce costs and increase efficiency, the relevant person in charge of the company's securities department told the Caixin News Agency reporter: "All the elements that make up the cost can be optimized, but the focus is still on energy." Having a certain volume advantage can also dilute the associated costs, while reducing power consumption through technological improvements.

The above-mentioned company executives said that in order to reduce power consumption, the company has adopted more new technologies in all aspects of transformation. Although a certain amount of additional investment is required in the early stage, it is "sharpening the knife and not cutting firewood by mistake". In the long run, the benefits of cost reduction and efficiency increase are more obvious.

According to the company, electrolytic aluminum capacity utilization will increase by 7.7 year-on-year in 2022, while carbon capacity utilization will increase by 6.8 percent. Alumina, carbon first-class product rate and aluminum liquid 99.85 above the proportion of tanks increased by 5.81, 4.05, 7.64 percent, the best level in history, at the same time, in order to further optimize the unit power consumption, the company is also gradually through the "big pressure small" and other ways to upgrade the original smaller level of electrolytic cells.

In terms of electricity, Chinalco has two parts: online shopping and self-provided electricity. A person from the company said that online electricity purchases are basically at the same level as the industry average electricity price, focusing on the acquisition of energy with price advantages such as self-provided electricity and hydropower.

According to company sources, the current cost of electrolytic aluminum is lower than that at the beginning of the year, and the company's competitiveness is within the top 50% in the industry.

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Aluminum price "lying flat" leader "rise": China's aluminum industry to expand energy consumption and reduce energy consumption.

Global commodity prices overall weak, aluminum prices are also "flat" for nearly a year. Recently, a reporter from the Financial Association visited and investigated Chinalco (601600.SH) and learned that as an aluminum giant, in the competition for electrolytic aluminum stock, it will further increase the market share of electrolytic aluminum through the implementation of surplus electrolytic aluminum indicators, resource integration and overseas layout. Through technological research and development, reducing the energy consumption of electrolytic cells, and transferring to low-cost areas, cost reduction and efficiency increase are realized.

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