MIIT: Adopt Seven Measures to Propel Transition and Upgrading of the Aluminum Industry



MIIT: Adopt Seven Measures to Propel Transition and Upgrading of the Aluminum Industry

Luo Tiejun, Deputy Director-general of the Department of Raw Materials, Ministry of Industry and Information Technology (MIIT), said at the China International Aluminum Forum 2014 on November 26 that the focus for the development of China’s aluminum industry should be placed on quality and benefit, as well as energy saving, emission reduction and sustainable development, the MIIT will drive forward the above work tasks from seven aspects.

Luo Tiejun said, aluminum is one of the most extensively used key raw materials in national economic development, China’s primary aluminum production now accounts for 50% of global total primary aluminum output, and more than half of China’s nonferrous metal output, both its output and consumption volume rank top worldwide. MIIT always attaches great importance to sustained healthy development of the aluminum industry, and strengthened guidance for the aluminum industry from strategy, planning, policy, and standard aspects, and encourage and push forward transition and upgrading of the aluminum industry. Following the uniform deployment of the Party Central Committee and the State Council, and the guiding opinions and requirements of the State Council on diffusing serious surplus conflict of capacity, actively push forward the diffusion of surplus in electrolytic aluminum production capacity.

Firstly, it unveiled “Twelfth Five Year Development Special Plan for Aluminum Industry”, aiming to guide the industry toward orderly and healthy development.

Secondly, it amended and unveiled “Aluminum Industry Norms”, which imposed higher requirements on enterprises from aspects of product quality, technical equipment, energy consumption, environmental protection, and safety, aiming to strengthen process, and post supervision on enterprises.

Thirdly, promote fair electricity usage for electrolytic aluminum enterprises, strengthen research on policies for fair electricity usage, encourage enterprises with conditions to build self supply power plant, carry out isolated power grid operation, restrain expansion of electrolytic aluminum capacity due to unfair electricity price.

Fourthly, push forward and improve the grade and scope of aluminum product application consumption.

With combined efforts from all sides, the aluminum industry has made significant achievements in the aspects of structural adjustment, deployment optimization, technological progress, overseas resource development.

Firstly, significantly improve technological equipment standard, the capacity of 300 kA and above electrolytic cells will account for over 60% of total national production capacity, ensure 600 kA electrolytic cell technology to begin industrialized application.

Secondly, the trend of electricity, aluminum, processing integrated development has taken shape, self power plant capacity of electrolytic aluminum enterprises has increased from 30% in 2010 to the current 60%, the percentage of aluminum liquid direct supply processing ability tops 60%.

Thirdly, new production capacity of electrolytic aluminum has been kept under control. In the first three quarters of this year, aluminum smelting industry fulfilled 42.7 billion yuan of fixed asset investment, down by 31% on Y-o-Y basis.

Fourthly, energy saving and emission reduction standard steadily improved. Since 2010, with fund support from the state government for phase-out of backward capacity, a total of 2 million tonnes of electrolytic aluminum backward capacity has been phased out, 160 kA below electrolytic cell have been basically totally phased out.

Fifthly, industrial deployment has been constantly optimized, production capacity in western regions has increased from 6.70 million tonnes in 2007 to the current 20 million tonnes.

Sixthly, development of overseas resources has made certain progress, some enterprises have implemented aluminum project investment in Indonesia, Australia, and Guinea.

Luo Tiejun considered that there are still some problems that urgently need settlement in the development China’s aluminum industry, including serious inadequacy in resource guarantee ability, against the current background of surplus in aluminum capacity, some enterprises are still expanding electrolytic aluminum capacity, the whole electrolytic aluminum industry sustained more than 10 billion yuan of loss. There is also an absence of effective mechanism for capacity exit. The existing electricity system is unable to promote fair and rational market order with orderly competition pattern.

Confronted with these problems, we should be perfectly aware that Chinese economy has changed from rapid growth to a new normal status of mid to high speed growth, industry is the main battleground for transition of economic development, and adjusting & optimizing product structure. The MIIT is carrying out “Made in China 2025” research and compilation work, kicks off manufacture power strategy, nonferrous metal “Thirteenth Five Year” development plan and related work, strives to bring about the transformation of China’s industry from big to strong. Against the existing background of complicated and changeable international situation, increasing pressure of economic downturn, it is necessary to properly use the specific economic development stage of “Three Phase Overlapping”, vigorously promote structural adjustment and transition upgrading of aluminum industry, place the focus of aluminum industry development on quality and efficiency, and on energy saving, emission reduction and sustainable development.

Deputy Director-general Luo Tiejun informed the meeting attendants that within a certain period in the future, MIIT would unfold work in the following aspects by focusing on aspects including diffusing surplus of electrolytic aluminum capacity, and creating fair competition market environment:

Firstly, strictly control blind expansion of electrolytic aluminum capacity. Based on the State Council’s guiding opinions on diffusing capacity surplus, the State Council will organize focused supervision this year, supervise regions with excessive capacity of projects under construction. Meanwhile, it will strengthen process and post supervision, for enterprises unable to satisfy industry standard requirements and enterprises continuing new construction of electrolytic aluminum projects, after tipoff and verification, the offending enterprises’ standard qualification will be cancelled.

Secondly, support capacity exit in high-cost regions. As the domestic economy enters new normal status, and against the grim situation of global macro economy showing slow recovery, exit of high-cost aluminum capacity is an inevitable trend. In the next step, we will use the backward capacity phase-out fund to continue support for exit of electrolytic aluminum capacity which lacks competitiveness. Meanwhile, join hands with related departments, continue to improve capacity exit guarantee mechanism and policy.

Thirdly, support regional power grid construction. Encourage aluminum enterprises and power generation enterprises up to standard requirements to, with asset as the bonding tie, carry out integration of aluminum-electricity-processing vertical industrial chain, strive to build industrial chain integrating power generation, aluminum oxide, electrolytic aluminum and aluminum processing, support construction of regional power grid in regions with relative high concentration of electrolytic aluminum enterprises and self power plant.

Fourthly, promote the creation of fair electricity-usage environment. Propel related departments and power grid companies to lower basic capacity fee of self-supply power plant and wheeling cost of self supplied power. Progressively minimize the price differences between grid power, self supply power, and regional power grid, restrain electrolytic aluminum capacity expansion caused by unfair electricity prices, reduce repeated power construction, increase the power generation hours of existing power plants and asset efficiency of electricity industry.

Fifthly, expand aluminum application consumption. Guide electricity industry to increase the usage of compound materials, support efforts to improve application of aluminum products in transport sector, support popularization and application of high strength aluminum alloy, large extrusion products, and aluminum sheet materials needed for developing aviation, freight train, and freight trucks fields.

Sixthly, strengthen global exchange and cooperation. By making full use of “One Belt And One Road” opportunity and the taking advantage of domestic aluminum processing in technology and equipment, while developing bauxite and constructing aluminum oxide projects in overseas markets, encourage cooperation between domestic and overseas enterprises, construct electrolytic aluminum and deep processing projects in countries with stable political, economic situation and rich resources, quicken the pace of improving globalization standard of the domestic aluminum industry.

Seventhly, propel in-depth integration of informatization and automation. Study and promote smart factory and smart production centering on information, material, and system network, which is an upgraded version of informatization and automation, in Germany it is called industry 4.0, in China it is called in-depth integration of informatization and automation, it will change the existing whole-package of organization procedures and functions, and change rules of the game. Aluminum industry should astutely realize this change, voluntarily explore the connotation of new industrial revolution, grasp its inner potential and energy, and as soon as possible lift the existing automated production, informatized management to the level of smart manufacture and smart factory.