The long-term growth trend of electrolytic aluminum is inevitable

In the past five years, the control of electrolytic aluminum production capacity has increased, from 10 million tons to 20 million tons. The New Deal looks like a strict inspection, but with the exception of Xinjiang, the long-term growth of production capacity is inevitable.

Calling control year after year, going up the stairs every year - this is precisely the embarrassing situation that the capacity control of the electrolytic aluminum industry has fallen into.

"From a policy perspective, this time it is true." An electrolytic aluminum company executives in Henan lamented. However, he further commented: "But this round of control has come down, I am afraid it will still have little effect."

Since 2005, the National Development and Reform Commission has clearly stated that it wants to control the new capacity of electrolytic aluminum. At that time, the national electrolytic aluminum production capacity just exceeded 10 million tons. In 2009, the National Development and Reform Commission once again reiterated: In principle, no new, modified or expanded electrolytic aluminum projects will be approved within three years. However, the more electrolytic aluminum production capacity, the more "control", has exceeded 20 million tons by 2010.

Since mid-April this year, nine ministries and commissions such as the Ministry of Industry and Information Technology urgently halted the planned construction of electrolytic aluminum and cancelled local preferential policies for the electrolytic aluminum industry. On the surface, this policy has become the most stringent policy to suppress electrolytic aluminum production so far. However, the reporter was informed that in the list of controlling electrolytic aluminum production capacity in all provinces and autonomous regions, Xinjiang, which is considered by the industry to have a rapid expansion of electrolytic aluminum production capacity in the next few years, has not been explicitly restricted, which puts the actual effect of a new round of production capacity restrictions on the A big question mark.

Stormy

The excessive growth of the electrolytic aluminum industry has challenged the domestic energy, environment, and basic raw materials. The fierce competition has also caused companies to complain. This year, domestic electrolytic aluminum prices have once again hovered near the cost line, and some electrolytic aluminum plants have been operating at a loss.

At the beginning of April 2011, Vice Minister of Ministry of Industry and Information Technology Su Bo participated in the third member congress of the Non-ferrous Metals Industry Association (hereinafter referred to as the Non-ferrous Association), and he took the lead in revealing the information to be strictly controlled. “We are drafting a comprehensive stop for electrolytic aluminum. Project plan."

News released, the industry generally adopts a wait-and-see attitude. The person in charge of the Guangxi Aluminium Plant stated that there is no confidence in the implementation of the policy. According to his “according to past experience,” he believes that in the end it may be a compromise, that is, all proposed projects cannot be completed and half of the project is completed.

Subsequently, nine departments including the Ministry of Industry and Information Technology and the National Development and Reform Commission jointly issued an emergency notice (hereinafter referred to as the "Notice"), emphasizing the strict control of the proposed electrolytic aluminum project. "Notice" pointed out that from the date of issue, all localities should immediately halt the proposed construction of electrolytic aluminum projects, and resolutely stop any new projects that increase production capacity from violating regulations; at the same time, they must emphasize that all localities must not violate laws, regulations and industrial policies. To attract investment, it is necessary to carefully clean up the preferential policies for the land, taxation, and electricity prices issued by the proposed electrolytic aluminum project.

According to statistics from the Ministry of Industry and Information Technology, there are currently 23 proposed electrolytic aluminum projects in the country, with a total size of 7.74 million tons and a total investment of 77 billion yuan. By the end of 2010, the national electrolytic aluminum production capacity was 23 million tons, actual output was 15.6 million tons, and the utilization rate of equipment was only 70%. In January-November 2010, the profit of the aluminum smelting industry was 10.441 billion yuan, and the sales profit rate was only 3.59%, which was far below the average level in the industrial sector.

An official of the Ministry of Industry and Information Technology, who declined to be named, said in a telephone interview with reporters that the reason why the electrolytic aluminum industry started this time was because of pressure from energy saving and emission reduction. The electrolytic aluminum industry with high energy consumption is naturally under control. On the other hand, the contradiction between domestic power shortages has become increasingly prominent. "To ensure economic growth, but also to maintain stability, to develop the economy with limited resources, we can only control the investment in electrolytic aluminum."

According to informed sources in the industry, the issue of strict production restrictions on electrolytic aluminum was “reported by Deputy Prime Minister *** to Wen’s Prime Minister personally and finalized”.

A person close to the Ministry of Industry and Information Technology told reporters that the tough policy this time is that more than 7.7 million tons of proposed capacity targets to be restricted have been broken down into provinces. “The Ministry of Industry and Information Technology and the National Development and Reform Commission actually hold a private internal list. Projects that were planned for each province were named and it was made clear that this project could not be used on that project."

Starting from 2009, the National Development and Reform Commission clearly stated that, in principle, the newly-built, rebuilt or expanded electrolytic aluminum projects will no longer be approved within three years, but local governments are driven by local interests and electrolytic aluminum plants are established under various terms such as new materials and downstream processing. The more "control" the more. “In the past, we had closed one eye against each of the various names of projects and did not name them. However, this time, the restrictions set a clear list of projects. It is almost impossible for the locals to use open-metal aluminum projects. "The aforementioned person said.

Although the relevant ministries and commissions are preparing to “rigorously check and swear”, this policy is still shrinking compared to the initial scenario. According to a person in the Aluminum Division of the Nonferrous Metals Association who participated in the formulation of the policy, before the introduction of the New Deal, the initial proposed tone was to “stop” the planned production capacity and “clean up” the capacity under construction, but during the formulation process, it was found that the production capacity was under construction. Cleanup is difficult to achieve and you have to give up.

This part of the so-called “construction capacity under construction” was estimated by Liang Lijuan, a COFCO researcher, to be about 3 million tons, involving Shaanxi Nonferrous Colored Yulin New Material, Xinjiang Xinfa, Ningxia Jinning Aluminum Magnesium New Material, Zhongdian Investment, and Zouping Gaoxin. Aluminum companies, Gansu Dongxing Aluminum, Huo Mei Hongjun, Chinalco Guangxi and other eight companies. "These production capacities are not listed in the state's planned production capacity and are under construction. It is expected that half of this year will become actual production capacity," she said. There are also industry insiders believe that this year's electrolytic aluminum production capacity will exceed this figure, reaching 56 million tons.

The aforementioned person close to the Ministry of Industry and Information Technology stated that from the list of restrictions on planned production capacity, “the projects that have been relatively well-formed and that have been approved by the local government have not been included, so the actual restrictions are only those that remain in the intentional stage and are not formed. In addition, some of Chinalco's proposed projects have also been affected."

Xinjiang "hidden worry"

Xinjiang is the most attractive area for the development of electrolytic aluminum production capacity in the next phase. Xinjiang is considered by the industry to set off an upsurge of electrolytic aluminum construction in the next few years. This time it did not appear on the list of limited production capacity. It was surprising.

“The capacity planning in Xinjiang is very crazy. There are 10 million tons currently being planned.” A number of industry sources interviewed by reporters said. Currently, in Xinjiang's electrolytic aluminum production capacity planning, only Oriental Hope Group has planned to build more than 3 million tons of electrolytic aluminum projects, of which 800,000 tons are under construction. Henan Shenhuo Group also has more than 1 million tons of planning; Chinalco also signed a strategic agreement with the local government, planning capacity of millions of tons. In addition, Hunan Shuangpai Aluminum Plant, Shandong Shunping Xinfa Aluminum Group, China Power Investment Corporation and other companies have also laid out here. If these capacity plans are fully realized, Xinjiang's electrolytic aluminum production capacity is likely to quickly exceed the 10 million tons mark.

Future competition in electrolytic aluminum is concentrated in upstream electricity prices, while Xinjiang's main advantage is rich and cheap energy. Liang Lijuan said that in Xinjiang, the cost of coal is very low, and wind power is also quite advantageous. However, this part of the power is not used in the local area and it cannot be transported to the Mainland. Therefore, the main purpose of planning and constructing electrolytic aluminum in Xinjiang is to store the electricity that has been released in vain to electrolytic aluminum.

Xinjiang's localities also regard the development of the electrolytic aluminum industry as an important part of driving the regional economy and stimulating employment, GDP and taxation. The model of “coal, electricity and aluminum” linkage is commonly implemented in the local area, that is, utilizing the advantages of coal resources to build a captive power plant and build an electrolytic aluminum plant.

Those who are familiar with the situation told the reporter that “The development of the Xinjiang economy” is an important bargaining chip negotiated by the local government and the Development and Reform Commission and other departments. “The NDRC has given green light to four projects in Xinjiang for the proposed or under construction projects, including Shandong Fuping Xinfa, Henan Shenhuo Group, Hunan Shuangpai Aluminum Plant and Oriental Hope Group, each with 800,000 tons.” However, the four companies It is uncertain whether companies can continue to expand their production capacity.

The above sources revealed that in addition to the advantages of low-cost coal, the four companies will jointly build coal-electric aluminum integration bases in the Wudangwan Mining Area in the Zhundong Coalfield, Changji Autonomous Prefecture. The advantage of several agglomerations lies in that if the electricity of the individual power plants is taken away from the national grid, the cost of the Internet access is very high, and the high transportation costs will offset Xinjiang’s resource advantages. “So they hope that these captive power plants can be connected together to form a small grid that runs off the large network. As a result, the cost of electricity is greatly reduced, which is about 0.1 yuan.” And the electricity cost of the mainland aluminum factory is usually 0.4 yuan per degree. Or more than 0.5 yuan.

Due to the low cost, once these electrolytic aluminum plants are completed, they will have a great impact on the relatively high cost of aluminum plants in the Mainland. “The shift of electrolytic aluminum production capacity to Xinjiang, where energy has a clear advantage, is in fact in line with the law of industrial layout changes. However, the end result of the national policy is to control the pace of development, not to go all the way, and to combine consumption in the current domestic market. The ability to grow at the same time." An analyst of Minmetals Nonferrous said to reporters.

At the same time, many people in the industry also expressed concern about possible environmental problems in Xinjiang. The electrolytic aluminum plant mainly involves the emission of fluorine, and the construction of thermal power plants involves the emission of carbon dioxide and carbon dioxide*. “In a small area, such a high-capacity, centralized construction, can environmental standards be met? Will it affect the local residents' drinking water?” a trader who declined to be named questioned.

According to local media reports in Xinjiang, Toksun County in Xinjiang Autonomous Region had rejected three large-scale electrolytic aluminum projects due to environmental factors.

In 2010, there were three companies investing more than 20 billion yuan to negotiate investment in electrolytic aluminum. However, these projects are highly polluting heavy metals and cause serious pollution not only to groundwater, but also to water consumption of up to 40 million cubic meters per year. Although once the three companies settled, they would bring tax revenue of 2 billion yuan a year to Toksun County, which was rejected by the county government.

As Xinjiang, which is the most ambitious to develop electrolytic aluminum, is not on the list of strict controls, the industry generally believes that the impact of this regulation is relatively limited. "The biggest role of the New Deal is to make the local and the central government reach a consensus and temporarily control the pace of development. But overall, the growth trend of electrolytic aluminum production capacity is still inevitable." The aforementioned Minmetals analyst said.

Liang Lijuan believes that “the next most important thing is to look at the situation of limiting electricity in Henan and Shandong, the main producing areas of electrolytic aluminum. Once the power shortage is serious, there will be a real shortage of supply on the supply side, which may support the price increase. ."