Chinalco shut down 380000 tons of electrolytic aluminum production capacity

It was reported on June 6 that under the pressure of shrinking downstream demand and overcapacity in the industry as a whole, the electrolytic aluminum industry has been tight for the winter. Chinalco announced on the 6th that the company decided to implement flexible production in some electrolytic aluminum production lines from the date of announcement, involving the temporary shutdown of electrolytic aluminum production capacity of about 380000 tons. 7075 aluminum alloy rod

According to insiders, due to the characteristics of electrolytic aluminum production equipment, it is difficult to shut down the machine when it is started, and the loss between opening and closing is as high as 200 million yuan. Under normal circumstances, electrolytic aluminum enterprises easily do not shut down production capacity. The initiative of Chinalco to reduce production this time marks that the electrolytic aluminum industry has once again entered the bottom of the industry cycle.

The last large-scale shutdown of electrolytic aluminum enterprises was during the financial crisis in 2008. Subsequently, under the effect of national economic stimulus policies, electrolytic aluminum enterprises gradually resumed production. By 2012, affected by the contraction of downstream demand, the problem of overcapacity in electrolytic aluminum industry was highlighted again.

It is understood that since August 2011, the cost of electrolytic aluminum sales began to hang upside down. In 2012, the average sales price of electrolytic aluminum in China was 15636 yuan / ton, and the average production cost was 16200 yuan / ton. The decline of electrolytic aluminum price directly leads to the loss of enterprises. According to the statistics of China Nonferrous Metals Industry Association, in 2012, among the 281 aluminum smelting enterprises above Designated Size, 89 were loss making enterprises, with a loss surface of 31.7%, and the number of loss making enterprises increased by 28 year-on-year; The loss of aluminum smelting loss making enterprises was 11.35 billion yuan, accounting for 35.4% of the loss making enterprises of non-ferrous metal enterprises above designated size.

"If aluminum prices go down again, more enterprises with higher costs will be forced to reduce production." The person in charge of the Sales Department of an electrolytic aluminum production enterprise in Henan Province told the China Securities Journal, "in terms of cost, the cost of some electrolytic aluminum manufacturers using hydropower in the western region is much lower, and the competitiveness of enterprises in the East and central regions will be weaker."