Shandong Will Intensify Support for Key Aluminum Enterprises



Shandong Will Intensify Support for Key Aluminum Enterprises

Recently, Shandong Province People’s Government published online the “Shandong Nonferrous Metal Industry Transition & Upgrading Execution Plan” (The Plan) compiled by the Provincial Metallurgical Industry Corporation and the Provincial Metal Society. This “Plan” made overall introduction and analysis on the general development status, future development trend and strategies of Shandong Province’s nonferrous metal industry. In recent years, nonferrous metal enterprises in Shandong Province have significantly improved production and operation benefit, nonferrous metal product output rose from 2.06 million tonnes in 2009 to 7.69 million tonnes in 2013, annual average growth rate is 30.1%; income from main business of nonferrous metal enterprises recorded annual average growth of 14.0%. On the other hand, aluminum smelting and processing industry, which occupies important position in the province’s nonferrous metal industry, remained in rapid growth stage in the recent five years, the main enterprises recorded relatively high profit-earning standard, Nanshan Aluminum, Xinfa Aluminum, Conglin Aluminum all have acquired relatively satisfactory economic benefits.

Aluminum smelting and processing industry output ranks top nationwide, with distinct industry cluster features.

According to the “Plan”, in 2013, Shandong Province’s aluminum oxide, electrolytic aluminum, aluminum product outputs are respectively 15.81 million tonnes, 6.72 million tonnes, and 8.79 million tonnes, respectively accounting for 35.6%, 30.5%, and 22.2% of national total, all ranking top nationwide. Shandong Province’s aluminum smelting enterprise are mainly distributed in the three cities of Binzhou, Liaocheng, Yantai. wherein, in terms of aluminum smelting capacity, Binzhou City accounts for 68.1%, Liaocheng City accounts for 16.9%, Yantai City accounts for 10.7%. Currently, there are 4 manufacturers of aluminum oxide in Shandong Province, whose capacity is 24.17 million tonnes; there are 7 electrolytic aluminum manufacturers, whose capacity is 9.33 million tonnes. The electrolytic aluminum outputs of Weiqiao Weiqiao Group, and Xinfa Group respectively rank top and fourth nationwide.

Shandong Province boasts high concentration degree of aluminum industry, and distinct industry cluster feature. Wherein, by adopting Xinfa Group’s aluminum electricity project as the main body, Chiping Xinfa Industrial Park has developed a modern industrial park integrating power generation, heating supply, aluminum oxide, electrolytic aluminum, and aluminum deep processing product manufacture and operation. Zouping Aluminum and Aluminum Processing Industrial Park have developed electricity-aluminum processing industrial park with Weiqiao Aluminum as the leader, and Qixing Aluminum and Chuangxin Metal as backbone. Longkou City aluminum and aluminum product industrial park have 21 manufacture enterprises, the products cover aluminum alloy sheet, strip, and foil products, profile processing and precision casting etc, which developed a complete production system spearheaded by Nanshan Group, with matching electricity-aluminum-material ability. Longkou Conglin Sino-German Body System Engineering Co., Ltd can manufacture 350 large component modules for metro, light rail and fast speed railway vehicles, and 3000 sets of railway train vehicle body modules, Conglin Automobile Company is the only aluminum auto manufacturer in the State Automobile Public Notice Catalogue.

In the aspect of production technology, Shandong Province continued to improve innovation ability in aluminum processing, developed a large number of products with high added value. Wherein, Nanshan Aluminum’s “high performance high precision large roll heavy width aluminum alloy sheet and strip processing technology and product – Can body stock” has reached international advanced level, replaced import. Conglin Aluminum independently developed 10000 tonne extrusion press to manufacture 380A EMU body profile and 400mm diameter seamless aluminum tube, which was awarded National Science & Technology Progress Award (1st class). The outputs of Lufeng Aluminum pharmaceutical aluminum foil and household foil both ranked top nationwide.

Although Shandong Province’s aluminum industry has made considerable progress in the recent several years, there are still a series of realistic problems including surplus in electrolytic aluminum production capacity, low aluminum processing ratio, and high energy consumption which need urgent solution.

Surplus of capacity in electrolytic aluminum, some enterprises have high energy consumption level. In 2013, Shandong Province’s electrolytic aluminum capacity is 9.33 million tonnes, the capacity utilization rate is 72%. Whereas national electrolytic aluminum production capacity is over 30 million tonnes, the capacity utilization rate is 71%, making it serious surplus status. Shandong Province’s aluminum smelting energy consumption is generally better than the national leverage level, but some enterprises have relatively high energy consumption, aluminum oxide overall energy consumption is 41 kgce/t higher than advanced level; overall energy consumption of electrolytic aluminum is 125kgce/t higher than advanced level.

Low aluminum processing ratio. In 2013 Shandong Province’s electrolytic aluminum output was 6.72 million tonnes, aluminum products output was 8.785 million tonnes, the ratio between aluminum products and electrolytic aluminum is 1.31, which lags far behind that of advanced provinces. The percentage of aluminum products of Shandong Province in national total output is 8.3 percentage points lower than that of electrolytic aluminum in national total output, the processing ability of aluminum products lags far behind that of advanced provinces.

Raw material resource is highly dependent on external supply. Shandong Province bauxite purchase 100% depends on overseas and out-of-province markets, making it easy to receive external factor interference due to changes in market situation and international trade friction, so as to affect stable development of enterprise production and operation.

Environmental protection work is inadequate in intensity. In the aspect of environmental protection, there exists large number of electrolytic aluminum rule-breaking construction projects, the online automatic inspection facility for pollutant emission as required by the “Aluminum Industry Standard Regulation” is incomplete, some enterprises’ total emission quantity differs from allowed emission quantity and there are other problems.

There is lack of high-end talent, and low R&D investment. Shandong Province nonferrous metal enterprises are mostly private enterprises, whose R&D ability is relatively weak. R&D investment only accounts for 1.0% of sales income, so as to remain disadvantageous in high-end product competition, there are very few products with self-owned intellectual property rights, the majority of products belong to follow-up R&D.

In view of the problems and inadequacies existing in the nonferrous metal industry, Shandong Province put forward overall target for transition and upgrading of the nonferrous metal industry, namely “optimizing structure, developing high-end, energy saving and emission reduction, improving environment, continuing to provide forceful support for the whole province’s economic development.” In the aspect of aluminum industry, Shandong Province will speed up adjustment in production capacity and industrial structure, focus on supporting Xinfa Aluminum, and Weiqiao Aluminum enterprises to develop into large enterprise groups with complete aluminum industrial chain including aluminum oxide, electrolytic aluminum, and aluminum processing material; support Conglin Aluminum, Shandong Chuangxin Metal, Zouping Qixing and other enterprises to develop into specialized aluminum processing backbone enterprises.

Adjust production capacity structure, and phase out a batch of backward capacity. Shandong Province will strictly control newly added production capacity of electrolytic aluminum, step by step raise the standard of energy consumption, material consumption, and environmental protection for industry access, develop reverse coercion mechanism, quicken the pace to phase out aluminum smelting enterprises with high energy consumption, heavy pollution, low product grade, backward production technology, and small scale. Implement electrolytic aluminum capacity substitution policy, compile capacity trading implementation method, progressively remove surplus electrolytic aluminum capacity. It is planned that by 2017 the electrolytic aluminum capacity will be reduced to 9 million tonnes; in 2020 no more new capacity will be added. In 2017 the ratio between aluminum products and electrolytic aluminum output will rise from 1.31 in 2013 to 1.50; and to 1.80 in 2020.

Improve and optimize a batch of products. Develop a batch of high-end aluminum products including aviation and space, transportation etc. By relying on Nanshan Aluminum, Zouping Qixing, focus on researching and developing high strength, high toughness, and high anti-fatigue, anti-corrosion medium and thick plate for aviation and space use, aluminum alloy plates for aviation and space use; by relying on Conglin Aluminum, Nanshan Aluminum, Yancon Light Alloy, focus on researching and developing and manufacturing aluminum products for railway transport vehicle body use such as fast speed trains, subway and light rail, maglev trains, vehicle body modular components, and high performance aluminum alloy materials for automobile and ship use; by relying on Conglin Aluminum, develop light weight automobile. Develop aluminum foil for packaging, and printing use. By relying on Nanshan Aluminum, Weiqiao Aluminum and other enterprises, research and develop high performance ultra thin plate and strip product and aluminum foil, all-aluminum self-opening can stock products. By relying on Zibo Denuo, develop large high performance aluminum alloy pre-stretched plate technology, manufacture high purity high pressure electronic aluminum foil.

Overcome a batch of advanced technology. According to the “Plan”, Shandong Province plans to increase the percentage of R&D investment into nonferrous metal industry in sales income to 1.2% above by 2017, spread and overcome a batch of key generic technologies that restrain industry transition and upgrading. By 2020, the percentage of R&D investment in sales income will be raised to 1.5% above, in order to accomplish obvious improvement in industrial technology, and product R&D ability.

Shandong Province will depend on Nanshan Aluminum, focus on overcoming high strength and high toughness aluminum alloy medium and thick plate for use in aviation and space, and military industry fields. By relying on the New Materials Research Institute of Shandong Province Academy of Science, Yancon Light Alloy and other units, accelerate development of high quality aluminum alloy casting founding process technology. By relying on Xinfa Aluminum, Weiqiao Aluminum and other units, focus on developing technology to recover caustic alkali and some aluminum oxide products mixed in Bayer Process aluminum oxide red mud, improve red mud integrated utilization ability. By relying on Xinfa Aluminum, Weiqiao Aluminum and Nanshan Aluminum, strengthen development of ultra large pre-baked electrobath cell key technology, reduce electricity consumption of electrolytic aluminum.

Develop a batch of industrial chains, nurture a batch of enterprise clusters. In the aspect of aluminum processing industry, Shandong Province will adopt upstream and downstream industrial chain integrated development mode. Electrolytic aluminum enterprises will extend toward downstream industry, develop electrolytic aluminum — aluminum processing — aluminum products deep processing product development mode. Aluminum processing enterprises will properly handle aluminum processing technology R&D, extend aluminum product industrial chain toward “Specialized, refined, special, and new” directions. foster and develop industrial cluster, encourage to adopt aluminum smelting enterprises as the spearhead, pursue intensive development mode, develop nonferrous metal product deep processing industrial cluster. The emphasis is placed on developing a batch of industrial parks including Xinfa aluminum industry park, Binzhou Zouping Aluminum industrial cluster, Yantai aluminum industry cluster etc.