Limiting electricity prices temporarily difficult to effect electrolytic aluminum production capacity regulation trap

With the arrival of the annual peak of summer electricity consumption, under the dual pressure of extremely tight electricity supply this year and the government's control of “strict inspection,” will the electrolytic aluminum industry cut production again? According to reports, the regulation and control policies for limiting electricity prices have been effective in some areas. However, under the influence of industrial transfer, downstream demand and other factors, the entire electrolytic aluminum industry is not able to effectively improve the overcapacity situation, and whether the industry's regulation is more controlled or not. It is also a big question mark.

After the middle of April, the nine ministries and commissions of the Ministry of Industry and Information Technology urgently halted the planned construction of the electrolytic aluminum and cancelled local preferential policies for the electrolytic aluminum industry. The electrolytic aluminum companies that were originally required to cut production due to limited power supply were faced with difficulties. More serious situation. In the summer when the peak of electricity consumption is approaching, is the electrolytic aluminum industry experiencing production cuts and production stoppages? At least not yet obvious.

Last year, Jiaozuo Wanfang, which was the first to call for a reduction in energy-saving and emission reduction tasks, seems to have to cut production to the end in this year’s exceptionally tense situation. Insiders pointed out that Henan and Hunan provinces with concentrated electrolytic aluminum production have implemented power cuts due to power shortages, but they have not affected local electrolytic aluminum production.

Although electrolytic aluminum is trapped in the vortex, it seems difficult to shake it. In 2005, the national electrolytic aluminum production capacity just exceeded 10 million tons. After a few rounds of regulation and control, it broke through 20 million tons in 2010. If the current planned production capacity does not stop development, it will reach 30 million tons at the end of the “12th Five-Year Plan” period. Calling for regulation and control year after year, and stepping up every year, this is precisely the embarrassing situation in which the capacity control of the electrolytic aluminum industry has fallen into. From the perspective of economic performance in the first quarter of this year, the growth rate of electricity consumption in 17 provinces exceeded the national average of 12.4%, and the growth rate of 14 provinces exceeded 14%. The excessive development momentum of high-energy-consuming industries has still not been effective. control.

People in the industry believe that the large-scale expansion of production capacity after the financial crisis is now released centrally, exacerbating the current tight supply of resources. Experts pointed out that the current vicious cycle of China's electrolytic aluminum industry is intensifying. Apart from the production of major companies in the industry, some energy companies have themselves entered the production of electrolytic aluminum. For example, some power generation companies also produce electrolytic aluminum themselves, which exacerbates the supply of resources such as coal and further deteriorates the allocation of resources.

If we do not control the new production capacity, the entire industry will have a bad prospect. For some of the toughest new rounds of regulation in the history, some people in the industry fear that it will be thunderous and rainy.

The price of aluminum or the adjustment of the industry but the actual situation does not seem as optimistic as some in the industry say.

From June 1st, the National Development and Reform Commission announced the increase of industrial electricity prices in 15 provinces and cities, and Henan, Hunan, Shanxi and other electrolytic aluminum production provinces ranked among them. The increase in electricity prices caused the average production cost of electrolytic aluminum enterprises to increase by 200 to 300 yuan per ton. According to reports, the price of aluminum sheet in the Henan market has also risen a lot recently due to the increase in prices of raw materials in the upstream.

According to statistics from the Henan Nonferrous Metals Industry Association, the overall operation of the Henan non-ferrous metal industry in the first half of this year was stable, but the “tight and two liter” problem of electricity shortage, tight funding, rising electricity prices and rising costs became more prominent. The electrolytic aluminum industry was still in the overall situation. Loss.

According to reports, the production of 10 major non-ferrous metals in Henan Province maintained a low growth rate in the first half of the year, and copper, lead, zinc and copper, aluminum, magnesium and magnesium alloys, alumina, and molybdenum concentrate all had a significant increase. In the aluminum industry, both alumina and aluminum materials have grown, and the output of electrolytic aluminum has dropped significantly. The main reason is that more than 1 million tons of electrolyzers that had been shut down during power cuts last year were restrained by the dual factors of electricity price increase and power curtailment this year.

In terms of benefits, the overall benefits of Henan's non-ferrous metals industry have increased significantly, but the electrolytic aluminum industry is still in an overall loss.

In the past three years, apart from short-term profit before and after the end of 2009, electrolytic aluminum enterprises in Henan have been basically in a loss state for the rest of the year.

Experts believe that for the rising cost of electrolytic aluminum production, the use of self-produced power plants may be able to solve the urgent needs of some companies. However, in the long run, the cost of coal for some small and medium-sized enterprises is too large, and the trend of high capacity growth is difficult to sustain. According to market estimates, after the summer peak season, the continued power-limiting policy will force aluminum prices to rise further, and product prices may become a sharp sword that forces the industry to adjust.

However, electrolytic aluminum companies have their own self-provided electricity, they can generate electricity, the impact on them is not yet obvious. It is estimated that if the current electricity restriction policy continues in July and August, aluminum prices will continue to rise.

However, at present, the global supply of electrolytic aluminum is still in a surplus trend, and the upward price will be restrained. Despite the strong downstream demand, as a global commodity that is priced, the probability of sustained upward price increases is small given the oversupply environment. The industry believes that the lack of electricity supply may lead to a significant increase in the cost of aluminum in some areas, but it remains to be seen whether a price-driven price increase can be formed.

Industrial transfer is about to start Although the power supply shortage will have a certain impact on the electrolytic aluminum industry, the impact on the entire industry may not be as large as expected by industry insiders.

According to the analysis, under the combined effect of industrial policy control and power supply shortage, the relative demand for output of the electrolytic aluminum industry will maintain a relatively low growth rate, and the difference in supply and demand growth will bring about improvement to the fundamentals of the industry. In addition, the western region has a comparative advantage over the power costs in the eastern and central regions, and the shift of electrolytic aluminum production capacity to the west will be a general trend.

Compared with the western regions of Xinjiang, Gansu, and Inner Mongolia, the cost of electricity for electrolytic aluminum enterprises in the central and eastern regions of China is relatively high. At present, many strong electrolytic aluminum companies in the East and Central China have started to shift their production capacity to areas with lower energy costs in the northwest.

Last year, the state eliminated the electricity price concessions for high-energy-consuming enterprises such as electrolytic aluminum, coupled with factors such as rising coal prices, rising power generation costs, and increased staff salaries this year. Electrolytic aluminum producers in some captive power plants in Henan and Shandong are also increasingly feeling To the rising cost of production costs. Therefore, some experts predict that in the future, China's electrolytic aluminum production capacity increase will come mainly from the western region. In particular, Xinjiang's capacity growth will have a significant impact on domestic supply and demand.

In addition, there is no near-term concern for the downstream demand, and the aluminum processing industry has become one of the factors supporting the long-term demand of the electrolytic aluminum market. According to reports, relevant companies have had full orders since the first quarter, and production has been operating at full capacity, indicating that downstream demand is strong. People in the industry believe that the main reason is that there is a time lag in the construction of new buildings. The consumption of architectural aluminum profiles at this stage is likely to remain at a high level. In addition, export growth also has a certain contribution to demand. If the economic slowdown at home and abroad in the second half of the year, the demand from the second half of the year to the beginning of next year will decline.