Ten Conjectures of China's Aluminum Industry in 2015

[China Aluminum] In 2015, it was a crucial year for the comprehensive deepening of reform, and it was also the year for the completion of the “Twelfth Five-Year Plan”. It was also the year of transformation and upgrading of the aluminum industry. In such an important year, what changes will the aluminum industry embrace? What are the “uncertain” factors facing the aluminum industry? At the end of last year, the Central Economic Work Conference conducted a full deployment of China’s economic work in the new year. The development of the Chinese economy under the new normal. Standing at the starting point of the new year, the aluminum industry faces both opportunities for development and new challenges. It is both full of worry and worry about the future. This paper combines the development of the aluminum industry in China and the deployment of the macro economy in the Central Economic Work Conference. The development of the aluminum industry in 2015 was analyzed and speculated. A hole for reference only.

Conjecture 1: Accelerating the reform of the mixed ownership system in the aluminum industry

In response to the Party's call for the Third Plenary Session of the 18th CPC Central Committee, the aluminum industry actively promoted the mixed ownership economy model. In 2014, significant progress was made in the mixed ownership of China's aluminum industry. On April 1, Hangzhou Jinjiang Group and China Aluminum Corporation signed a strategic cooperation agreement on the Guiyang Qingzhen alumina project, marking the frontline of China National Aluminum Corporation and private Jinjiang Group. The mixed ownership project officially started.

As a matter of fact, the hybrid system has long since embarked on the aluminum industry. Prior to the China Aluminum Guiyang project, Zhaofeng Aluminum, a wholly-owned subsidiary of the state-owned Shanxi Yangmei Coal Group, and the Jinjiang Group have held hands. The cooperation is broadly divided into custody and joint reorganization. The cooperation between Alcoa and Jinjiang Group officially opened a new path for the privatization management of state-owned enterprises. The current custody phase has reached the expected goal and both parties have entered the stage of joint restructuring.

According to reports, a number of national policies and measures related to the reform of state-owned enterprises in 2015 are expected to be introduced before the Spring Festival. The functional positioning of SOEs and the relevant operating rules for mixed ownership reform will be further clarified. This fully shows that the mixed ownership reform of state-owned enterprises is still the highlight in 2015.

For the aluminum industry, the low-key involvement of Jinjiang Group in 2014 was just the beginning of a mixed-ownership reform in the aluminum industry. Perhaps the real mixed ownership reform drama will be staged in 2015. In fact, some companies are now interconnecting and warming up for "hybrid." For example, China Aluminum Chairman Ge Honglin held talks with Dongfang Hope Group Chairman Liu Yongxing shortly after he took office, and Liu Yongxing made a high-profile announcement in an earlier public interview that Chinalco had cooperated with the mixed ownership system in the past year. . However, Eastern hopes that this private enterprise, which wants to show its hands in the aluminum industry, is very likely to wait for a chance in 2015. It is reported that Chinalco has begun a new round of internal reforms, and its subordinate companies are carrying out personnel simplifications. This may be understood as paving the way for further implementation of mixed ownership.

Therefore, 2015 may be a year in which the progress of the reform of the mixed industry in aluminum industry is deepening. The year in which the high-quality state-owned assets are connected with the advanced management model is at its peak.

Conjecture 2: The pace of "going out" of enterprises will accelerate

"Going out" is something that China's non-ferrous metals industry has been doing in recent years. Especially during the global financial crisis, some companies have made remarkable achievements in going abroad to purchase non-ferrous mineral resources, but relatively few in smelting and processing industries.

In 2014, Indonesia, which is a major importer of bauxite in China, issued a ban on ore exports and banning bauxite exports. In desperation, Chinese enterprises had to invest in aluminum smelters in Indonesia and seek resources in other regions.

On May 7, 2014, Xinfa Group and Jamaica discussed the establishment of a joint venture to invest US$3 billion in the construction of an alumina plant. After that, Hongqiao Group spent about 750 million yuan to acquire a company that is engaged in the mining of bauxite in Guinea. The company was established in July 2013 by its shareholding company, Hongfa Weili Company, in Kampala Danang, Kalimantan, Indonesia. Dawanggan Town builds an annual output of 2 million tons of alumina.

In 2015, as more countries in the world tightened their export policies for ore resources and the increase in international “double counter” activities, as well as the intensified domestic aluminum production capacity, more companies would have to “go out” to find aluminum. Mineral resources, more aluminum production capacity will be transferred abroad.

Recently, Premier Li Keqiang presided over the executive meeting of the State Council to deploy more financial support for enterprises to "go global" and promote steady growth, structural adjustment and promotion. The meeting pointed out that the overall situation in the domestic and international markets should be coordinated, and financial support for enterprises "going out" should be strengthened, and China's advantages and surplus production capacity should be promoted to go abroad, promote cooperation between Chinese and foreign production capacity, and expand the development space. Li Keqiang pointed out that supporting enterprises to "go global" is not only conducive to defusing domestic surplus and high-quality production capacity, but also more conducive to China's economic restructuring and promoting industrial transformation and upgrading.

Although the advantages and surplus production capacity mentioned in the meeting may not necessarily refer to the aluminum industry, China's aluminum smelting technology has reached a leading level in the world. For example, the integrated AC power consumption of aluminum ton aluminum is only 13680 kWh. The capacity of electrolytic aluminum has been set as a high-energy-consuming industry, and it seems that it is no longer a “sweet potato” of the national economy. This is a good time for China's high-quality aluminum production capacity to shift abroad.

Therefore, in 2015, whether it is investing abroad in bauxite or building aluminum smelting plants will usher in a peak period of opportunities.

Conjecture 3: The intensive benefits of the aluminum industrial park are further manifested

In recent years, with the rapid development of China's aluminum industry, the national and local governments have effectively guided and planned the aluminum industry, and the planning and construction of aluminum industrial parks in various regions has mushroomed like the Chongqing Xipeng Aluminum Industry District. Nanning Aluminum Industrial Park and Hejin City Accelerate Aluminum Industry Park, Inner Mongolia Huolinguole Industrial Park, Xuzhou Peixian Aluminum Deep Processing Industry Park, Guangxi Baise Xinshan Aluminum Industry Demonstration Park, Chongqing Haojiang District Aluminum Industry Park, Xinjiang Shanshan Industrial Park, Yunnan Dozens of aluminum industrial parks such as Wenshan Matang Industrial Park and Shaanxi Dongjiahe Industrial Park. At present, many industrial parks have achieved remarkable economic benefits. The effects and advantages of aluminum industrial parks have gradually emerged, and even some industrial parks have become the pillar industries in the area.

In particular, the Xipeng Aluminum Industry Zone in Chongqing, established in 2003, relied on its unique location advantages and good industrial and urban infrastructure. The park diversified its development and introduced the “1+4” hot rolling, automotive rail profiles, and OGS Nano. Touch screens and other industry flagship projects have been constructed with China Aluminum Aluminium Southwest Aluminum, Chinalco Sapa, Tiantai Aluminum, Dika Jieli wheels, Xun Xun Aluminum, Jiangda aluminum alloy wheels, Xinhua West Aluminum, Tian Benefits Machinery Zhizhi, Chongqing Jiehe Aluminum, etc. as the leading aluminum processing industry chain industrial cluster. The formation of electrolytic aluminum → aluminum processing → deep processing aluminum → recycled aluminum industry's entire chain, was hailed as "China's aluminum processing capital."

The aluminum industry cluster effect in Shandong is even more prominent. At present, the Siping Xinfa Industrial Park with the Xinfa Aluminum Project as its main body has been formed; the Weiping Industrial Park with Weiqiao as the leader, the Qixing Aluminum Industry and the innovative metal as the backbone; and the Nanshan Mountain has been formed. The Group and Jungle Group are leading Longkou Industrial Parks. The cultivation and development of the three major aluminum industrial parks basically provided strong support for Shandong's achievements in China's aluminum province and province.

In 2015, with the completion of some new park projects, the park effect will gradually emerge. In particular, like the release of capacity in the northeast and northwestern regions, the benefits of the new round of aluminum industrial park clusters continue to grow, and the economic benefits of the park will become more prominent during the year.

Conjecture 4: Private capital entering the aluminum industry or culminating again

In 2014, the two companies listed in the “Aluminum Industry Regulatory Conditions” issued by the Ministry of Industry and Information Technology re-ranked electrolytic aluminum companies from the side. That is, Shandong Weiqiao Group, with a large production capacity, has a production capacity of 4.02 million tons, ranking second. It is Aluminum Corporation of China, with a production capacity of 3.8 million tons; ranking third is Shandong Xinfa Group, with a production capacity of 3.48 million tons; ranking fourth is China Power Investment, with a production capacity of 3.23 million tons. In descending order, Dongxing Aluminum, Oriental Hope, Shenhuo Group, Tianshan Aluminum, Yunlv Stock, Yidian Holdings, Xinjiang Qia, Henan Yulian, Qinghai Xinheng, Shandong Yili, Henan Wanji and so on. As a breakdown, how much of the production capacity is invested by state-owned capital?

This is also true in the alumina industry. Although there is no publicly available data, private capital also occupies a majority. For example, it is publicly reported that the current alumina production capacity of Hangzhou Jinjiang Group has reached more than 700 million tons. Shandong Xinfa Group, Weiqiao Group, Chongqing Bo The private capitals such as Saikuang Mining, Nanshan Aluminum Group and Luoyang Xiangjiang Wanji Aluminum Controlled considerable alumina resources.

In the aluminum processing industry, the proportion of private enterprises’ capital is even greater. In 2012, the list of top ten architectural profile companies rated by the China Nonferrous Metal Processing Association and the top ten industrial aluminum extrusion companies in China was basically private enterprises. What's more, after two years of rapid development, the development of private enterprises in the aluminum processing industry has grown stronger.

On the other hand, with the gradual advancement and deepening of state-owned enterprise reforms, the outside world has expected that 2015 will become a landmark year for the reform of state-owned assets and state-owned enterprises.

Therefore, in 2015, with the advancement of the state-owned enterprises and the acceleration of the reform of state-owned enterprises, the enthusiasm of private capital to enter the aluminum industry will become higher and higher. It is expected that private capital will enter the aluminum industry again in the new year. climax.

Conjecture 5: Aluminum application market accelerates

Unblock and improve production capacity. For excess aluminum production capacity, two measures have been taken to control new production capacity and expand application in recent years.

As early as the beginning of 2012, the China Non-Ferrous Metals Industry Association took the lead in launching the “Green Aluminum” launching ceremony in Guiyang. At this point, the industry initiated the “Strengthening Green Aluminum Promotion and Promoting Aluminum Consumption Action” curtain, followed by promotion. All aluminum semi-trailer activities, construction aluminum template promotion activities. With the strengthening of the application and promotion of green aluminum, the application of aluminum is deeply rooted in people's minds. The work in the areas of "Al-generation steel", "Al-generation wood" and "Aluminum section copper" have been gradually promoted.

According to reports, the relevant departments are also stepping up efforts to formulate plans to support the promotion of aluminum trailers. Coincidentally, in order to promote the use of lightweight aluminium products for transport vehicles, a batch of excess electrolytic aluminum production capacity was absorbed. On September 19, 2014, the Ministry of Industry and Information Technology of the Ministry of Industry and Information Technology held a seminar on the promotion and application of aluminium materials for transportation in Beijing. The meeting was attended by the China Nonferrous Metals Industry Association, Southwest Aluminum, Shenhua Group, Junlin Group, Wutong Group, Weiqiao Aluminum Power, and Nanshan Group.

At the same time, in order to promote the establishment of a collaborative innovation mechanism between aircraft manufacturing companies and aviation aluminum processing companies, we will upgrade our aviation aluminum processing standards. On December 15, 2014, the Department of Raw Materials Industry and the Department of Equipment Industry of the Ministry of Industry and Information Technology jointly organized a symposium on the promotion and application of aviation aluminum materials. Defense Industry Bureau, Civil Aviation Administration, Planning Department of the Ministry of Industry and Information Technology and other departments and the AVIC Xi'an Aircraft Group, China Shangfei Shanghai Aircraft Design and Research Institute, Chinalco Southwest Aluminum Corporation, Northeast Light Alloys, Chinalco Northwest Aluminum Processing Representatives of the plant and AVIC Beijing Aerospace Materials Research Institute attended the meeting.

In the second half of 2014, the Ministry of Industry and Information Technology successively convened two companies in the aluminum industry and related application design fields to conduct business meetings. To convene such a heavyweight conference, it is not difficult to see that the country will intensify efforts in these areas in the new year. Promote aluminum applications.

Therefore, in 2015, the country may increase its promotion efforts in aluminum, such as transportation, aerospace, electric power, and construction. For example, it will speed up the introduction of relevant industry application standards, strengthen the coordination and communication among related departments, and promote the application of aluminum. Sexual progress.

Conjecture 6: Further increase in conversion rate of primary aluminum in situ

Shandong is already the largest producer of electrolytic aluminum in China. It is reported that there is about 9 million tons of production capacity. However, in Shandong Province, there is no excess aluminum, and even aluminum and liquid aluminum are in short supply. This is due to the transformation and upgrading of local companies, which transformed all electrolytic aluminum into aluminum products to export outside the province and abroad. The root cause of this problem is that aluminum companies in Shandong have adopted the market forcing mechanism to increase the conversion of primary aluminum in situ. Rate, increase product added value, realize the transformation and upgrading of the industry.

The Shandong model has provided experience for electrolytic aluminum producing areas. For example, in Xinjiang, although electrolytic aluminum production in Xinjiang ranks among the top in the country, there is a problem of high transportation costs. One-way shipping costs about 600 yuan per ton, and two tons of alumina. It is capable of producing one ton of electrolytic aluminum, transporting two tons of alumina from inland to Xinjiang for freight of 1,200 yuan, and processing one ton of electrolytic aluminum to inland transportation requires another 600 yuan, thus completing the production and sale of one ton of electrolytic aluminum on freight. Requires 1,800 yuan, plus electrolytic aluminum processing costs, the cost will be higher. If deep processing of aluminum materials can be carried out in Xinjiang, it will save 600 yuan in inland transportation costs per ton. In addition, aluminum water must be cast into aluminum ingots to be shipped out. If aluminum is developed locally in Xinjiang, more than 60% of the aluminum water can be processed directly into aluminum processing materials, which can also save 200 yuan in costs. Counting down the cost is greatly reduced. At the end of 2014 in Foshan, Guangdong Province, “Extending Aluminum in the Construction Industry Application Forum”, Luo Tiejun, Deputy Director of the Raw Materials Division of the Ministry of Industry and Information Technology, disclosed that the Ministry of Industry and Information Technology will encourage the deep processing of aluminum formwork and other aluminum materials in Xinjiang and promote the use of primary aluminum in Xinjiang. Local transformation.

The same problem also exists in Inner Mongolia and other places. With the continuous shift of electrolytic aluminum production capacity in recent years, the electrolytic aluminum production capacity in the northwestern region has already reached a considerable scale. In 2015, these production capacities will all be released in succession. However, the aluminum price in the market has not seen any improvement and has remained at a low profit. Under normal circumstances, and this normality is difficult to change, so relying solely on the sale of primary aluminum is no longer a way for companies to survive, companies must increase the conversion rate of primary aluminum in situ, extend the industrial chain, and accelerate the transformation and upgrading.

Therefore, in 2015, whether it is the government's guidance and encouragement or the market's inflexible mechanism, improving the conversion rate of primary aluminum in situ will be an important part of the industrial transformation and upgrading work.

Conjecture 7: Overcapacity in the aluminum industry is still intensifying

The market has not been opened, and production capacity has gone ahead. For low-end aluminum processing capacity, because the threshold is low and the technical content is not high, companies are more likely to get involved. For example, in the aluminum formwork industry, although the China Non-Ferrous Metals Industry Association has cooperated with related departments in promoting the aluminum formwork in recent years, it has not been used in large areas because of construction standards and application costs. However, the aluminum formwork production capacity has been greatly increased. In the Guangdong region, enterprises with aluminum and aluminum doors and windows mainly build aluminum formwork production capacity, and some aluminum enterprises with regional protection advantages are basically building new formwork production lines. However, in the short term, there are still various types of aluminum formwork market. Certainty, so to say that in the new year, the phenomenon of low-end overcapacity appears more prominent.

In fact, high-end production capacity may not be overhang, such as high-speed rail industrial aluminum there are signs of excess, we need to be vigilant. In the past year, Premier Li Keqiang has vigorously promoted our high-speed rail to foreign countries. In essence, it is also indirectly promoting our industrial aluminum extrusions.

From January to August 2014, the investment in the aluminum industry shows that China's aluminum smelting industry (including electrolytic aluminum, alumina, and recycled aluminum) completed a fixed asset investment of 35.5 billion yuan, a year-on-year decrease of 33.9%, and aluminum extrusion processing industry completed a total of 118.9 billion yuan in fixed asset investment. Yuan, a year-on-year increase of 24.1%. It can be seen that investment in aluminum processing remains unabated.

The electrolytic aluminum industry, although the country has suppressed new capacity and eliminated it backwards, the new trend is still increasing. For example, the output of electrolytic aluminum in Xinjiang has now leapt to the second largest province (region) of primary aluminum production in China. The annual output of electrolytic aluminum in Xinjiang was approximately 4.2 million tons. Currently, it has a production capacity of 4.37 million tons. It is expected that it will have a capacity of 6.01 million tons by the end of 2014. It is expected that by the end of 2015, Xinjiang will have a capacity of 6.5 million tons of electrolytic aluminum. The total electrolytic aluminum production capacity eliminated in 2014 was only 420,000 tons, which is far less than the new capacity in one region. What's more, there are also a lot of new production capacity in Shandong, Guangxi, and Inner Mongolia.

Therefore, with the successive completion of new production capacity in 2015, the excess capacity of electrolytic aluminum is still difficult to reverse, and the aluminum supply and demand market is still difficult to change.

Conjecture 8: The government's control policy on the aluminum industry gradually faded out

China's aluminum industry, from scratch, from small to large, from large to strong, seems to have never been out of the regulatory intervention. It is said that in recent years, the government has resorted to "heavy punches" in controlling the production capacity of electrolytic aluminum, but it is somewhat unsatisfactory. However, in the past 2014, the government seems to realize that the effectiveness of the policy in this area is limited, so this regulation and control seems to be much less than in previous years. Although some enterprises still continue to call for criticism, there are few policies that have come to an end. Therefore, in the coming year, it is expected that the government's regulation and control policies for the aluminum industry will become less and less, and ultimately rely on market forces.

The Third Plenary Session of the 18th CPC Central Committee emphasized the need to open "invisible hand" and make good use of the "visible hand" of the government. The implication is that in the past, policy intervention was relatively excessive, resulting in the industry not following an ideal direction. In the future, this practice will change.

In 2014, electrolytic aluminum companies called on the government to strengthen its support for the aluminum industry, hoping to reduce or eliminate the export tariffs on primary aluminum, and promote the domestic and foreign markets, hoping to boost domestic aluminum prices and ease business difficulties, but in 2014, On December 16, 2015, China's main commodity import and export tariff adjustment plan announced on the website of the Ministry of Finance, the original aluminum export tariff remained unchanged.

Therefore, in 2015, there will not be too many industrial regulation policies. In the long-term, it will still need to be coordinated with the market.

Conjecture 9: The environmental protection and safety work in the aluminum industry will increase

In 2014, two safety and environmental events occurred in the aluminum industry, pushing the aluminum industry to the public in another role. This undoubtedly allows the aluminum industry to re-examine existing safety production work and environmental protection work.

On August 2, 2014, an aluminum dust explosion occurred at the aluminum wheel polishing plant of Zhongrong Metal Products Co., Ltd., Kunshan City, Jiangsu Province, resulting in 75 deaths and 185 injuries. On December 30, 2014, China’s State Administration of Work Safety issued a report saying that the State Council has approved the “8.2” special aluminum dust explosion accident investigation report of Jiangsu Rongcheng Metal Products Co., Ltd. in Kunshan City, Jiangsu Province, and confirmed that it was a production safety accident accident. The 18 responsible persons for suspected crimes have been transferred to the judicial authorities to take measures to impose party discipline and political discipline on the other 35 responsible persons. Among them, Shi Heping, member of the Party Group and Deputy Governor of the Jiangsu Provincial Government, Zhou Naixiang, deputy secretary of the Suzhou Municipal Party Committee, and Wang Xiangming, Secretary of the Party Group and Secretary of the Jiangsu Provincial Bureau of Safety Supervision, have recorded disciplinary actions. Coincidentally, on December 6th, the media exposed the problem of Chuangyuan Aluminum in Taoyuan County, Hunan Province, due to waste landfills, dumping of waste, and pollution to the surrounding environment. After that, the environmental protection departments of the Ministry of Environmental Protection and the Environmental Protection Department of Hunan Province intervened in investigations and put forward orders for rectification.

These two incidents are not only incidents that occurred in the aluminum industry. What is more similar is that the two incidents are basically due to lack of management and caused bad results. In fact, in the final analysis, it is a responsibility issue, as long as the company pays enough attention to avoid it. These two incidents also sounded alarm bells for the non-ferrous industry.

In 2015, the aluminum industry's environmental and safety production work will be mentioned at an unprecedented height. The government, regulatory agencies, local people, media, etc. will increase supervision of the aluminum industry, so companies are required to put safety in the new year. The production and environmental protection work should be given top priority and must not be taken lightly.

Conjecture 10: International anti-dumping efforts will increase

In 2014, which was just past, foreign countries’ efforts in aluminum products in China are unprecedented. For example, India imposes temporary anti-dumping duties on Chinese aluminum alloy wheels. The anti-dumping bureau of the Ministry of Commerce and Industry of India has made a preliminary ruling on anti-dumping investigations involving aluminum alloy wheels in China and proposes to impose temporary anti-dumping duties. In March, the Ministry of Development, Industry, and Foreign Trade of Brazil issued an announcement and launched an anti-dumping investigation on aluminum-based printing plates in several countries including China. The investigation period was October 2012. Aluminium-based printing imported in September 2013 Version. In March 2014, the Canadian National Trade Tribunal (CITT) announced a review of the double countermeasures for aluminum profiles imported from China and will extend the implementation of the above measures to March 17, 2019. On April 14, 2014, the aluminum products produced by the Australian team in China were investigated for anti-circumvention investigations. The products involved in the case were avoided through a loss-making sales situation and achieved the expected tax effect. On June 12, 2014, Australia conducted an anti-dumping mid-term review review of aluminum profiles originating in China. The review investigation period was April 1, 2013 to March 31, 2014.

One of the problems described by these "double reverse" incidents is that China's aluminum industry has increased its processing capacity, and has caused competitive pressure on local companies and aluminum products in other countries. Therefore, it encountered the "double counter" sanctions imposed by local governments.

In 2015, with the increase of the overall strength of China's aluminum industry, China's aluminum enterprises will accelerate the pace of “going out” and more aluminum products in China will enter the international market. It is expected that “double reverse” events will occur in the new year. There is no increase. Therefore, in 2015, how to deal with the international "double reverse" incident, how to protect the interests of China's aluminum enterprises in the "double reverse" incident will become more urgent and important.

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