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Overseas supply of raw aluminum supply gap has become a downstream demand highlights
Aug 08, 2017

Overseas supply of raw aluminum supply gap has become a downstream demand highlights

Overseas primary aluminum market supply and demand adjustment first, production cost curve becomes steep; shipped downstream demand highlights, lightweight vehicles will become an important market for aluminum.

Overseas major aluminum enterprises have been decreasing since 2010, while demand growth is relatively stable, and we expect the overseas primary aluminum market will have a gap of about 1 million 800 thousand tons in 2017, and the gap between supply and demand is further enlarged than in 2016. While the domestic electrolytic aluminum supply side reforms at the local level will accelerate the landing at 8-9 months unable to obtain compliance capacity index part of the enterprise production will be in mid October before the central test face no capacity contraction pressure active compliance capacity indicators, the supply and demand of domestic aluminum market will have the original difference narrowed.

Overseas supply of raw aluminum supply gap has become a downstream demand highlights

From the main overseas aluminum electrolytic aluminum enterprises to resume production and cost line tracking point

The resumption of production capacity to be released in 2018 after the resumption of production cost is relatively high, is expected to 1900-2200 dollars / ton, the Russian Aluminum production line new tons of aluminum capital expenditure corresponding 3500-5400 dollars / ton.

Alcoa

In January 19, 2017 the company announced the resumption of power supply interruption in Australia for the production of Portland smelter capacity, the accident since the smelter capacity utilization rate of less than 30%, the resumption of production after the corresponding new primary aluminum supply increment is expected to be 200 thousand tons.

In July 11th the company announced a partial recovery in Warrick capacity of smelter, restart the 3 cell 5 in the electrolytic bath (corresponding to 269 thousand tons of production capacity of 161 thousand tons), is expected in 2018 1 moon smelting products, the 2 quarter of 2018 the completion of production. To meet the demand of upstream rolling line for upstream aluminium liquid material. 2017H2 restart cost is estimated at 3000-3500 million tons of electrolytic aluminum production, the corresponding cost of nearly 1467 yuan. Alcoa in March 2016 Warrick shut down the primary aluminum smelting capacity, then the corresponding aluminum price at 11500 yuan / ton, is a production line of Alcoa since 2007 finally shut down, can be understood as is one of the most cost-effective. By the end of 2016, has a total of Alcoa primary aluminum smelting capacity of 3 million 576 thousand tons (313.3 tons of production capacity interests), the resumption of production accounted for total capacity 4%.

Rusal

The company announced that its annual capacity in Siberia Boguchansk smelter increased from 149 thousand tons to 298 thousand tons, and is expected to be completed by the end of 2018, with a total capital expenditure of $5409 per ton of aluminum.

In July 12th the company announced the resumption of the stalled Siberia tayshet aluminum smelter project, the estimated total investment of $1 billion 500 million, the corresponding production capacity 430 thousand tons, equivalent tons of primary aluminum investment of $3488, is expected to be completed in 2020.

In 2016, the average cost per ton aluminum Alcoa in 1581 U.S. dollars / ton, was significantly lower than that in 2015 1828 U.S. dollars / ton and $2200 / ton 2013-2014 production cost. As a result, the company shut down production lines in 2013-2015 years, the cost should be more than 1900-2200 U. S. dollars / ton. The current cost of Alcoa level in the global 38% points in 2016, the global aluminum supply 59 million tons, of which about 40% of the corresponding capacity cost in the range of $1000-1600 / ton, corresponding to 60% capacity cost in the range of $1600-2000 / ton, the subsequent increase in output will face steep production cost curve.

Downstream demand highlights: Automotive Lightweight will become an important market for aluminum

Compared with other light materials, aluminum alloy has become the best choice for all countries to promote lightweight and green development because of its reasonable cost, mature supply, abundant supply, light weight and recyclable quality. According to Ducker Worldwide forecast, in the next ten years, from the global market, only light vehicles with aluminum volume of nearly 15 million 750 thousand tons, making lightweight cars become the most important market for aluminum.

Ducker Wordwide is expected to the global auto market in 2025 with aluminum accounted for more than doubling the existing basis reached 16%, including the North American market will reach 19% vehicle kerb mass.

Ford 2015 F-150 aluminum body, bicycle aluminum amount to 490kg, compared to the previous model bike weight loss 318kg, 2016 production, the annual capacity of 850 thousand, corresponding to the car board 350 thousand tons.

Attention to the rising demand for primary aluminium Market in India

India's investment in infrastructure, automotive and construction industries has provided an important growth opportunity for downstream aluminium consumption. In the 2015-2016 fiscal year, India produced 2 million 440 thousand tons of aluminum, an increase of 19.1% over the same period of last year; 1 million 980 thousand tons of aluminum consumption in China, an increase of 25.4% over the same period of last year, and an increase of 15% over the same period. At present, India's per capita consumption of metal aluminum is only 1.5 kg, compared to China's per capita consumption of 22 kilograms of aluminum metal, there is a great market potential.









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