Electrolytic aluminum under macro-control In recent years, the rapid development of China's electrolytic aluminum industry has received much attention. In order to ensure the healthy development of the electrolytic aluminum industry, the state has increased the control over electrolytic aluminum, and the investment in electrolytic aluminum has begun to cool down, and it has shown a rational development momentum, which will surely help to quickly improve the core competitiveness of China's aluminum industry. Never like today, an industry can involve so many departments, closely linked to the hearts of so many people, and electrolytic aluminum due to its special industrial connection has attracted much attention, several times in the non-ferrous industry set off waves, become the target of public criticism. In response to the surge in investment in electrolytic aluminum that has surpassed waves, the state has increased its control over electrolytic aluminum, especially since May 2003. Under the boost of the market, the investment in electrolytic aluminum began to cool down, and it is developing toward a rationalized road. A comprehensive, coordinated and sustainable development concept is becoming the consensus of the decision makers of electrolytic aluminum companies. The development history of the electrolytic aluminum industry has once again confirmed that under the conditions of the market economy, solving the problem of overheating of the industry and local economies, the government’s macro-control has become more important and urgent. Regulation is really due to investment overheating due to the reality and the potential of huge markets and substantial investment returns, "the Ninth Five-Year Plan" since China's aluminum industry has been rapid development. The development in the past four years has seen rapid progress. The world is amazed. By the end of 2003, China's electrolytic aluminum production capacity reached 8.34 million tons, and the new production capacity reached 2.84 million tons, an increase of 52% year-on-year. The actual output reached 5.56 million tons, a year-on-year increase of 27%. Since 2001, the actual output of electrolytic aluminum in China has increased by 1 million tons per year. While the electrolytic aluminum investment boom is driving the rapid development of electrolytic aluminum, the contradictions and problems caused by it have begun to be exposed: First, the irrational industrial structure has been exacerbated, and the overall competitiveness of the electrolytic aluminum industry has been severely restricted. The number of electrolytic aluminum companies in China exceeds the total number of electrolytic aluminum plants in other countries in the world, and it has now reached 147, but the average size of enterprises is only a quarter of the world average. Most of the newly-added electrolytic aluminum enterprises are built in areas where energy is relatively tight, which has increased the difficulty of structural adjustment and restricted industrial upgrading. The second is a serious surplus of production capacity, causing vicious competition. The annual average demand for aluminum in China is increasing at a rate of 500,000 tons, while the current output is a one-million-ton increase in output. According to relevant predictions, the actual output of electrolytic aluminum in China will reach 7 million tons/year by 2005, and the actual demand will be around 5.5 million tons. The result of supply and demand imbalance will be mutual killing. The third is a substantial increase in electricity load, resulting in power shortages. Since the second half of 2002, the electricity supply in most parts of the country has been strained and power cuts have been forced. The cause of the power shortages is inseparable from the consumption of electrolytic aluminum enterprises in recent years. In 2003, the electricity consumption of electrolytic aluminum reached 8.3 billion kWh, accounting for 4.4% of the country's electricity consumption. Fourth, the aluminum oxide gap has been exacerbated, resulting in substantial price increases for raw materials. China's alumina gap is relatively large, about half of which need to be imported. In 2003, it imported 5.6 million tons. At present, domestic alumina production is being expanded, but it is difficult to change the pattern that China's electrolytic aluminum companies rely too much on outsourcing. This undoubtedly increases production costs and market risks. In addition, the investment heat of electrolytic aluminum has also increased financial risks. The unit investment of electrolytic aluminum is between 6,000 yuan and 10,000 yuan. In the event of market fluctuations, it is difficult to meet the production standards, and investment is difficult to recover, which will inevitably create more non-performing assets. Excessive electrolytic aluminum plant construction also poses pressure and threats to environmental protection. Relevant policies were successively promulgated. In fact, as early as 1999, in response to the current situation of China's electrolytic aluminum investment gradually warming up, the relevant state agencies have successively promulgated the production process equipment for self-baked tank electrolytic aluminum that eliminates environmental protection standards, and stop the construction of self-baking tank electrolytic aluminum projects. Industrial policies to prevent the low level of repeated construction of electrolytic aluminum. Since 2001, the construction of self-baking tanks has been replaced by pre-baking tanks and new investment in electrolytic aluminum has been formed. Therefore, in April 2002, the General Office of the State Council promptly transmitted the “Opinions on Preventing the Repeated Construction of the Electrolytic Aluminum Industry†by the State Development Planning Commission and the State Economic and Trade Commission (No. 29 of the State Administration of Industry [2002]), requiring all localities to control electrolytic aluminum production capacity. The rapid growth. However, shortly after the documents were issued, the investment boom began to rebound. If this investment is carried out blindly, it will inevitably have serious consequences. In May 2003, the National Development and Reform Commission, which was just established, issued the "Opinions on Further Strengthening Macro-control to Promote the Orderly Development of the Electrolytic Aluminum Industry", and requested the effective implementation of the documentary spirit of the State Council to control the investment in electrolytic aluminum and proposed six articles. Clear opinion. In August of the same year, the National Development and Reform Commission reiterated this opinion. At the same time, the General Office of the State Council, in a document issued by Guobanfa [2003] No. 103, forwarded the “Several Opinions on Stopping Blind Investment in the Electrolytic Aluminum Industry from Violating Regulations†issued by the Development and Reform Commission and other departments, and again put forward four opinions, requesting that containment be done as soon as possible. Electrolytic aluminum violation construction, blind investment momentum. At the same time, related policies have been introduced. The State Administration of Taxation's export tax rebate rate for aluminum ingots has been reduced from 15% to 8% from January 1, 2004, and will be adjusted downwards until cancelled. This largely limits the export of electrolytic aluminum products. Immediately afterwards, the National Development and Reform Commission also made adjustments to the electricity supply price of electrolytic aluminum enterprises. From January 1, 2004, the price of electricity was increased by 0.8 points per kilowatt-hour; the preferential electricity prices for electrolytic aluminum were cancelled everywhere. The electrolytic aluminum enterprises that enjoy preferential policies in the original national industrial policies can only be the base of 2002, and the newly added demand power is no longer preferential. At the same time, all those who have not collected 2 cents of agricultural network repayment funds in the past will be resumed. The electricity price of the electrolytic aluminum enterprises was raised a few cents at a time. The industry really felt the seriousness of the external situation. The more stringent measures were taken on February 4, 2004 when the State Council convened a video teleconference to control the investment in steel, electrolytic aluminum, and cement industries. The State Council has sent more than 10 inspection teams to key areas for supervision and inspection. According to the spirit of this meeting, the China Banking Regulatory Commission began to conduct an inventory of the electrolytic aluminum companies' loans. The China Securities Regulatory Commission also stated that it strictly controls listing or increasing capital, and prohibits allotment of funds to invest in illegal electrolytic aluminum projects. The State Environmental Protection Administration has also made demands on local environmental protection agencies, requiring companies to phase out backward self-baked tanks within a limited period, and strengthen the review of the existing electrolytic aluminum environment. For projects that do not start unauthorized construction according to the legal procedures, construction under construction shall be suspended, production shall be suspended, and shall be handled in accordance with relevant laws and regulations. At the same time, according to the relevant regulations of the State, the small generator set that provides power for electrolytic aluminum will be shut down. The Ministry of Land and Resources also decided to clear the land use situation of the electrolytic aluminum industry according to the new functions. The investment in alumina caused by electrolytic aluminum was also listed as a key point of control. The approval of mining rights was strengthened, and illegal mining was strictly prohibited. , Strictly approve bauxite exploration licenses and mining licenses. In addition, provinces and municipalities have earnestly implemented the spirit of the meeting and actively cooperated with specific measures. All this is aimed at a multi-pronged approach to high-speed recovery of electrolytic aluminum. The suffering of raw materials and electricity is the pressure of the policy. On the other hand, it is the pressure of the market. Electrolytic aluminum is in dire straits. It is really miserable. No wonder some companies send out "end of the world" reflections. First, the price of alumina as the main raw material soared, and there was no market for the price. Alumina is the main raw material for electrolytic aluminum. About 2 tons of alumina are consumed per ton of aluminum ingot production. Construction of electrolytic aluminum plant in foreign countries does not dare to invest in the contract guarantee without raw materials. However, the electrolytic aluminum company in China has built a stove to find rice. Constrained by the fact that people are subject to the market itself determines market risk. 90% of foreign companies have signed long-term contracts with raw material companies, and only the remaining 10% of raw materials are adjusted on the spot market. Most of aluminum oxide in electrolytic aluminum enterprises in China are purchased in the domestic and foreign spot markets. However, the domestic alumina market is far from meeting the needs of domestic electrolytic aluminum production. Under the huge market demand, the price of alumina in foreign countries rose. Over the past year, alumina has increased prices several times. The alumina of foreign countries has risen to 5,400 yuan per ton from 1,800 yuan in December 2002. Alumina also rose from 1,300 yuan per ton to 4,300 yuan now. The soaring price of alumina and the cost of electrolytic aluminum companies have greatly increased the profits. Many companies that do not have the ability to purchase aluminum oxide are forced to suspend production. Even powerful companies start to consider reducing production due to cost reasons. In addition, the increase in power price increases undoubtedly gave electrolytic aluminum a stick, which is indeed worse. In the past, due to the relative surplus of electricity, preferential policies for supporting electricity consumption by high energy-consuming enterprises such as electrolytic aluminum have been introduced in various regions. It can be said that this is also the main reason for the excessive growth of high-energy-consuming industries such as electrolytic aluminum, which also laid a hidden danger for the power shortage in the later period. Since the second half of 2002, there have been power cuts in many parts of the country. In order to ease power shortages and thereby reduce the inefficiency and ineffective demand for electricity, the National Development and Reform Commission adjusted the preferential pricing policies for electrolytic aluminum enterprises at the end of 2003. Compared with electrolytic aluminum companies, it rose by 0.8 points. Up to 4.8 points. As everyone knows, the electricity consumption per ton of aluminum is 15,000 kWh, and each rise or fall in electricity price is a significant number for electrolytic aluminum companies. The direct impact is cost and efficiency. Due to power shortages, many companies in the electrolytic aluminum industry have been classified as the preferred power curtailment. Qinghai, Inner Mongolia and other places have begun to reduce the supply of electricity to electrolytic aluminum, electrolytic aluminum production has been seriously affected. There is no cheap and sufficient power protection, and it is difficult to purchase alumina, and the cost of production and operation is too high. More than 30 companies have stopped or semi-discontinued production. The electrolytic aluminum heat began to drop due to the control of the country’s macroeconomic policies. Coupled with the shortage of alumina and electricity markets, the electrolytic aluminum industry began to cool down significantly. Many projects that were originally approved by the state were slowed down due to lack of guarantees for electricity and raw materials. Investment. According to Kang Yi, president of the China Nonferrous Metals Industry Association, the phenomenon of overheated investment in the electrolytic aluminum industry has basically been curbed. Since August 2003, there have been basically no new planning and construction projects; some of the projects under construction have been delayed or suspended; and those that have already been built have not yet been started. The CEOs of some companies also told reporters that the design institutes that used to break through the threshold are still few people asking for advice. They began to worry about the absence of an electrolytic aluminum project and expanded their new business. Through this regulation, more decision-makers in the industry began to rationalize the investment in electrolytic aluminum, which led to three favorable changes in the electrolytic aluminum industry. This is also indicative of the sustainable development of electrolytic aluminum. The pace of industry consolidation has accelerated. In accordance with the policies encouraged by the state, some companies have started mergers and acquisitions within the industry. From the development report of the aluminum industry in 2003, the pace of joint, mergers and acquisitions, and restructuring of the aluminum industry has accelerated, and it has demonstrated its vitality. Among them, China Aluminum Corporation, which was initiated and established by Chinalco, was the most attractive company. The group absorbed nearly 70% of electrolytic aluminum production capacity. Some local electrolyzed aluminum companies actively merged into leading companies, making the mutual interests more closely linked. Baotou Aluminum and North China Aluminum Assets Transfer Chinalco has initiated a substantive reorganization of provincial and municipal enterprises and central enterprises. Electrolytic aluminum companies in various provinces and cities have also begun to seek regional joint reorganization. Henan Shangluo Aluminium Lin Aluminum has played a leading role in the consolidation of the regional electrolytic aluminum industry. Domestic capital also began to set foot in the electrolytic aluminum industry, in which Tianjin Zhongmai Group’s 8 billion yuan huge investment in the overall acquisition of the Yellow River aluminum power is a bright spot. In addition, foreign investment has begun to enter the electrolytic aluminum industry. Canada Aluminum Corporation has formally signed a joint venture agreement with Qingtongxia Aluminum Group Co., Ltd. and Ningxia Electric Power Development and Investment Co., Ltd. The domestic electrolytic aluminum investment subject is more diversified. Private enterprises and energy companies are becoming new forces in the electrolytic aluminum industry. The voice of going out went up. The market impact of alumina also made more electrolytic aluminum companies aware of the dangers of sparring and swimming, and actively sought strategic cooperation with alumina companies at home and abroad. While signing long-term supply contracts, the call for joint use of two resources, domestic and foreign markets, to avoid risks in the raw material market is growing. In 2003, China National Construction Corporation, Aluminum Corporation of China, Minmetals Group, and Huaalu Industrial Investment Co., Ltd. and other enterprises accelerated the pace of overseas resource development and made gratifying progress, with relevant departments in Australia, Vietnam, the United States, and the Philippines. The company signed a cooperation agreement. Domestic alumina investment has also gradually improved. The active participation of local governments and multi-party investment in alumina projects will effectively promote the construction of alumina projects. Aluminium joint venture model is recognized. Aluminium is an international development model. Companies that do not have this advantage are not competitive and will sooner or later be eliminated. This pattern of development is adopted in many places and enterprises in our country. Most enterprises in Henan are aluminum power companies. After these companies have achieved aluminum joint ventures, their electricity prices are below 0.3 yuan per kilowatt-hour. Even if the electricity price is raised, sporadic outsourcing of electricity will not affect the production and operation of the company. This is also the reason why its electrolytic aluminum company has a competitive advantage in the market, making it the main reason for the national electrolytic aluminum province. According to statistics, there were 22 electrolytic aluminum enterprises that started in Henan in 2003 and the annual output reached 1.38 million tons. In the development of aluminum-electricity joint ventures, it has now begun to shift to places where hydropower is more concentrated. Up to now, there have been 49 joint ventures of aluminum power companies, accounting for 33% of the total number of enterprises, and the production capacity has reached 4.22 million tons, accounting for 51% of the total production capacity. Convinced that tomorrow will be more beautiful, the problems encountered in the current development of electrolytic aluminum should be properly faced. After all, the realistic and potential aluminum market requires us to have a healthy development of electrolytic aluminum. Experts pointed out that the excessive development of the aluminum industry in recent years is the result of domestic demand, which is a normal phenomenon in the process of industrialization. People in and outside the industry are also convinced that after this baptism, electrolytic aluminum will be even better tomorrow. Face the potential market. The per capita aluminum consumption in China is about 3.5 kg, which is far lower than that of developed countries and also lower than the world average. With the continuous development of the national economy, aluminum has become more widely used for the in-depth development of aluminum products, and the market has broad prospects. The characteristics of aluminum determine that it holds the second position among metal materials. It is second only to steel in terms of its application or consumption. The characteristic that aluminum has recycling recycling without affecting performance is called "green product". Therefore, the aluminum industry has great potential. The industrial chain is more rational. In the past two years, most of the newly-built electrolytic aluminum enterprises have adopted large-scale pre-baked cells, which has further enhanced the overall level of equipment in the electrolytic aluminum industry. Now 160KA and large prebaking tanks have a production capacity of 561 tons, which accounts for 67% of the total production capacity. Due to the regulation and the role of the market, a considerable part of China's self-baking tanks and small pre-baked tanks will be phased out. It is expected that about 2 million tons of production capacity will be phased out within two years. This gives existing companies a certain amount of living space. In addition, Aluminium's joint ventures have made the industry chain of the aluminum industry more rational. The continuous extension of the industrial chain gives full play to the advantages of energy and resources. Experts have proposed coal (water)-electricity-aluminum, alumina-aluminum-aluminum processing integration industrial chains are being formed, which largely makes resources The configuration is more reasonable and the combination of production factors is more efficient. This laid a solid foundation for the development of electrolytic aluminum into sustainable development. The problem of raw materials can be alleviated. The formation of market awareness has increased the initiative to avoid market risks. At the same time, the development of alumina resources at home and abroad will help solve the raw material restriction bottleneck of electrolytic aluminum enterprises in China. After 2 to 3 years, the alumina supply of electrolytic aluminum in China will no longer be the same as today. At present, the total domestic alumina production capacity under construction will reach 5 million tons. However, due to the long investment cycle and other factors, the short supply of raw materials cannot be resolved immediately. This requires our domestic companies to stand at a high level, starting from the overall interests of the electrolytic aluminum enterprises, and changing the decentralized buying into joint procurement. Suppress foreign alumina market prices. This requires not only the attitude of electrolytic aluminum companies, but also the actual reduction of production and production restrictions. Otherwise, it will be the interests of the entire electrolytic aluminum industry, and it will pay an unnecessarily huge price for this. Optimistic about power supply. In the next two years, the situation in the national electricity market will be tight, but as the country increases investment in electricity, it will gradually ease after 2005. Zhang Guobao, deputy director of the National Development and Reform Commission, said that the lack of electricity is expected to be completely resolved in 2006, and that the reforms such as direct supply of electricity have brought us good electricity market information. At the same time, the China Non-Ferrous Metals Industry Association has not abandoned its efforts to obtain preferential electricity prices for electrolytic aluminum companies. However, our electrolytic aluminum companies must also fully realize that to solve the long-term power supply problem of electrolytic aluminum in China, it is still necessary to take the road of aluminum and electricity joint ventures. Without sufficient and long-lasting power guarantees, electrolytic aluminum cannot be produced stably. Date: 2004-7-15
