China’s Demand For Secondary Aluminum May Not Increase Obviously in 2015



China’s Demand For Secondary Aluminum May Not Increase Obviously in 2015

As the economy continued to grow, the consumption volume and social accumulation volume of domestic aluminum products continued to increase, according to preliminary estimate, in 2015 domestic scrapping of all kinds of new and old aluminum products will top 4 million tonnes, which will provide powerful raw material guarantee for the sustained development of regenerated nonferrous metal industry. Furthermore, in recent years import aluminum-containing waste continued the status of inversion of price, using more domestic aluminum scrap will become an irreversible trend in the next several years. Transportation is a major application field of secondary aluminum, in 2014 China’s automobile output growth dropped slightly, against the background that the economy walked into “the New Normal” and domestic primary aluminum capacity continued to remain surplus, it’s almost certain that primary aluminum price will be kept at low level, this also implies that in 2015 China’s demand for secondary aluminum will not experience significant growth, nor will market prices record obvious increase.

In recent years, the continual popularization of automobile aluminum sheet has become a new growth point of aluminum alloy consumption. Klaus Kleinfeld, Chairman and CEO of Alcoa, said, the year 2014 marked the beginning of enormous development kicked off by the automobile aluminum industry, in 2015 the content of automobile body aluminum sheet manufactured in North America is expected to quadruple; according to forecast by Novelis, by 2020 global automobile industry’s demand for aluminum sheet will reach 1.80 million tonnes; According to estimate by Japan KOBELCO, by 2020 China’s demand for automobile aluminum sheet will top 300,000 tonnes. However, currently China’s secondary aluminum products are basically still primary casting aluminum alloy ingot, although in recent years the aluminum liquid direct supply model between secondary aluminum manufacturers and downstream automobile component manufacturers has made rapid progress, in the essence it did not expand the variety of secondary aluminum products, the regeneration of high-end wrought aluminum alloy is still at exploration stage. Therefore, continual technological innovation of regenerated aluminum industry to expand product variety of secondary aluminum will represent the future development trend of the secondary aluminum industry.

As the government further intensified efforts in streamlining administration and delegating power, in 2015 the secondary aluminum market environment will further improve. The “Catalogue of Preferential Policies on Products & Labor VAT for Resource Integrated Utilization” will be amended and unveiled, more nonferrous metal regeneration utilization enterprises are expected to enjoy VAT preferential policy, so as to improve enterprise competitiveness. The promulgation of “Mid to Long Term Planning on Construction of Regenerated Resources Recycling System (2015-2020)” will surely accelerate China’s construction of scrap and used goods recycling system, and exert positive impact on the development of secondary aluminum enterprises that use domestic scrap materials. The standard management work of secondary aluminum industry will unfold extensively, production and operation order will be further standardized, industry concentration degree will further improve, standardized enterprises will obtain more encouragement and support, in order to ensure the industry to acquire long term healthy development.