Overview of China’s aluminum industry chain in 2021 upstream, middle and downstream markets and enterprise analysis

Aluminum, it’s a chemical element, the chemical symbol is Al. Aluminum is the most abundant metal element in the earth’s crust, ranking third after oxygen and silicon. Aluminum is a light silvery metal. Ductility and malleability. Commodities are usually made in rod, sheet, foil, powder, ribbon and filamentous form. In metal varieties, second only to iron and steel, for the second large category of metal. The application of aluminum is very extensive, in aviation, construction, automobile three important industrial development, requires the material characteristics of aluminum and its alloy unique properties, which is greatly conducive to the production and application of this new metal aluminum.

1. Industrial chain

Aluminum industry chain is the process of converting bauxite into alumina by Bayer method or sintering method, and then using alumina as raw material to produce primary aluminum by high temperature molten salt electrolysis process. After adding alloying elements, electrolytic aluminum is processed into aluminum profiles and strip foils by extrusion and pressing, which are widely used in real estate, automobile, packaging, electric power and other fields.

2. upstream analysis

Aluminum industry chain is characterized by single raw materials and single production technology. Bauxite is almost the only raw material for the production of alumina, which is the only raw material for the production of electrolytic aluminum. More than 90% of alumina in the world is produced by bayer process, namely alkaline process, and all primary aluminum is produced by molten salt electrolysis process.

2.1. Bauxite

Aluminum ore is a mineral assemblage containing alumina or hydrated alumina and has economic utilization value. It is the main raw material for alumina production. In recent years, the domestic supply of bauxite has become increasingly difficult, in addition to environmental supervision, mine rectification, mining rights transfer system reform and other policies to limit output, the basic conditions of its own domestic mines are not ideal. At present, the proportion of domestic mining only accounts for 25%, civilian mining and import mine respectively in 35% and 40%. Global bauxite production reached 3.7 billion tons in 2019, up 13.15 percent from 3.27 billion tons in 2018, data showed. China’s bauxite production fell to 75 million tons in 2019, down about 4 million tons from 2018.

Bauxite is concentrated, with guinea, Australia, Vietnam, Brazil and Jamaica accounting for 72% of the world’s reserves. China has only 3% of global bauxite base reserves, but 20% of global annual production. In terms of regional distribution, bauxite is mainly distributed in Guangxi and Guizhou in southwest China, and Henan and Shanxi in central China.

2.2. The alumina

There are three main alumina production methods: Bayer process, alkali lime sintering process and Bayer – sintering process. Generally, high grade bauxite is produced by Bayer process and medium and low grade bauxite is produced by combined process or sintering process. Due to its simple process and low energy consumption, Bayer process has become the most important method used in alumina production, accounting for about 90% of the total global alumina production.

With the continuous release of capacity in the domestic alumina industry, production increased rapidly, reaching a peak of 72.531 million tons in 2018, up 5.09% year on year. In 2019, domestic alumina production decreased slightly to 72.474 million tons, down 1% year on year, but still maintained high development. By the end of January-October 2020, China’s cumulative alumina production was 60.635 million tons, down 0.8 percent year-on-year.

2.3. The electrolytic aluminium

Electrolytic aluminum is aluminum obtained by electrolysis, which is mainly used to produce various aluminum processing materials for different purposes. Data show that from 2015 to 2019, China’s electrolytic aluminum consumption showed an overall growth trend. In 2019, although the growth rate of electrolytic aluminum consumption declined, it still increased by 2.4% compared with 2018, reaching 36.72 million tons. Domestic consumption of electrolytic aluminum in 2020 was 38.188 million tons, an increase of 5.77% compared to 2019, and it is expected that China’s consumption of electrolytic aluminum in 2021 will reach 39.87 million tons.

2.4. Recycled aluminium

Recycled aluminum refers to the aluminum alloy obtained from waste aluminum as the main raw material through pretreatment, smelting, refining, ingot and other production processes. Aluminum has strong corrosion resistance, low loss in the use process, and will not lose its basic characteristics after repeated recycling, with high recycling value. In addition to significant economic advantages, recycled aluminum can also effectively save natural resources and protect the ecological environment

Data show that in 2019, China’s renewable aluminum production reached 7.15 million tons, is expected to reach 7.99 million tons in 2021, a compound annual growth rate of 5.5%, recycled aluminum has become an important part of China’s aluminum industry.

3. midstream analysis

The middle reaches of the aluminum industry chain is aluminum processing, which produces aluminum profiles, pipes, bars and other extruded materials, flat rolled materials such as plates, belts and foils, as well as various kinds of aluminum materials such as casting materials through smelting, rolling, extrusion and surface treatment and other processes and processes.

3.1. Aluminum production

According to the different processing technology, aluminum can be divided into aluminum rolling material and aluminum extrusion material, which can account for more than 95% of the output of aluminum processing material. Among them, aluminum rolling material generally refers to aluminum plate, aluminum strip, aluminum foil, aluminum extrusion material generally refers to aluminum profile, aluminum wire, aluminum pipe and other products. China is a major country in aluminum rolling processing, and according to the National Bureau of Statistics, from 2010 to 2020, China’s aluminum production increased from 22.375,000 tons to 57.793,000 tons, with a compound annual growth rate of 9.94%. The main aluminum production areas in China are shandong, with a total output of 11.3787 million tons; The cumulative output of Henan was 10.3156 million tons; The cumulative output of Guangdong was 5.283,200 million tons.

3.2. Proportion of aluminum products

From the perspective of Chinese aluminum structure, the proportion of aluminum profile is the highest, followed by aluminum sheet and strip foil, and finally aluminum die casting.

3.3. Aluminum

Aluminum profiles are mainly used in architectural and industrial fields, which can be divided into two categories: architectural profiles and industrial profiles. Building profiles are mainly used in the construction and real estate industry. In the consumption field of building aluminum profiles, aluminum alloy door, window and curtain wall profiles account for the main body. Industrial aluminum profiles are mainly used in transportation, mechanical and electrical equipment, durable goods, electronic appliances four fields.

3.4. Aluminum alloy

Aluminum alloy has a series of excellent characteristics, such as easy to process, light weight, good electrical conductivity, as well as its relatively low cost to replace steel, copper and other materials. The data show that China’s aluminum alloy production fluctuates significantly, but the overall growth trend is maintained. China’s aluminum alloy production in 2020 is 9.636 million tons, and the compound annual growth rate from 2015 to 2020 is 8.9%. It is expected that the aluminum alloy production in 2021 can reach 10.376 million tons.

3.5. The aluminum foil

Aluminum foil can meet the requirements of easy recycling, green environmental protection, water resistance, high temperature resistance and other aspects, can completely block light, gas and moisture, waterproof, maintain umami, anti-bacteria and anti-fouling. At present, China’s annual consumption of aluminum foil volume of 161,300 tons, has become the world’s second largest aluminum foil consumer, only the United States, but in the packaging field is relatively low, China accounted for only 17%, relative to the United States, Japan, Europe of 70%-75% is still relatively low. With the rapid development of downstream tea drinks, energy drinks, carbonated drinks and other diversified beverage varieties and the continuous improvement of beer canning rate, the market capacity is expected to continue to expand in the future.

4. Downstream analysis

4.1. The construction

According to Mysteel, construction is the largest downstream application of aluminum in China, accounting for 33 percent. At present, China’s construction industry has maintained a certain growth rate, with the total output value reaching 24.84 trillion yuan in 2019, up 5.7% year on year. Construction and installation industry as the installation of various equipment in the building and the construction of the line laying and pipeline installation activities, the development of the construction industry is bound to bring about the related needs of construction and installation.

4.2. Smart mattress

Automotive industry is one of the main application fields of industrial aluminum profile. As an important means of energy saving and emission reduction, automotive lightweight has become the development direction of the future automotive industry, and aluminum alloy material is the main application material of automotive lightweight target. Data show that in 2020, 25.225 million and 25.311 million cars were produced and sold, down 2.0% and 1.9% year-on-year, and 5.5 and 6.3 percentage points narrower than the previous year respectively.

Post time: Mar-02-2022