Buy The Rumor, Sell The Fact in China Aluminum Market? SMM Exclusive

Telah Terbit: Jan 25, 2017 11:19
Media has again speculated about aluminum capacity cuts in Hebei, Shandong, Shanxi and Henan under the title of China Plans to Cut Aluminum Capacities to Cope with Air Pollution.

SHANGHAI, Jan. 25 (SMM) – Media has again speculated about aluminum capacity cuts in Hebei, Shandong, Shanxi and Henan under the title of China Plans to Cut Aluminum Capacities to Cope with Air Pollution. The speculations were triggered by the release of Beijing-Tianjin-Hebei Air Pollution Prevention and Control Action Plan (Opinion Soliciting).

SMM, however, takes a different stance, with reasons as below.

SMM Interpretation of Surging SHFE Aluminum after Capacity Cut Rumor in Henan, Shandong and Shanxi

First, aluminum producers will face high production costs to produce in off-peak hours. It takes 750 yuan or above to stop and start in unit aluminum production, and costs will reach 2.25 billion yuan based on capacity cuts of 3 million tonnes in the four regions. Large aluminum producers may still have room to adjust themselves in the face of high costs, but small producers will have no other choice, but to exit, posing difficulties in carrying out the policy, which promotes to cut aluminum capacities by 30 percent during the winter heating season.

Aluminum Capacity in Shanxi, Hebei, Henan and Shandong     Unit: 10,000 mt

Region

Capacity Built 

Idled Capacity

Operational Capacity

Shanxi

104

4.5

99.5

Hebei

8

3

5

Henan

384

101

283

Shandong

1095

27

1068

Source: SMM

Second, aluminum producers are major taxpayers to one region's budget, and also largest single employers in the region. Take Shandong Weiqiao Pioneering Group as an example. The Group Shandong Weiqiao paid 8 billion yuan of taxes in 2016. Closing of small and medium aluminum producers will lay off a large number of workers, leaving a big employment issue to local governments.

Third, China’s aluminum capacities are now at 42.50 million mt, and operational capacities are 36 million mt, with utilization rates at around 84.7%. According to SMM data, newly-added aluminum capacities are estimated to exceed 5 million tonnes. So, low-cost capacities are expected to continue entering the market even if off-peak production policy is carried out during the 2017 winter heating season in the industry.

Fourth, the number of domestic aluminum producers has dropped from 150 to 80 over the past 6 years, but annual capacities have increased from 20 million mt to 42.50 million mt. Meanwhile, low-cost capacities are entering, while high-cost ones are leaving, and the trend is still going on.

Fifth, the annual growth of aluminum consumption is about 10%, and the growth is much higher than that of other nonferrous metals. Moreover, application of aluminum products is growing.

China’s aluminum industry is in a comparative supply surplus now, after comparing supply and consumption in absolute terms, SMM concludes. With capacity control policy gradually taking effect, China’s aluminum capacity growth has shown a sign of falling, but this could not exclude intermittent surplus. Investors are advised to taking cautious attitude towards risks exposed to overdone speculations on environment protection policy and capacity cuts, SMM adds.

For news cooperation, please contact us by email: sallyzhang@smm.cn or service.en@smm.cn.

Pernyataan Sumber Data: Kecuali informasi yang tersedia untuk publik, semua data lainnya diproses oleh SMM berdasarkan informasi publik, komunikasi pasar, dan mengandalkan model database internal SMM. Hanya untuk referensi dan tidak menjadi rekomendasi pengambilan keputusan.

Untuk pertanyaan atau informasi lebih lanjut, silakan hubungi: lemonzhao@smm.cn
Untuk informasi lebih lanjut tentang cara mengakses laporan penelitian kami, hubungi:service.en@smm.cn
Berita Terkait
3 Pelabuhan Belanda (Termasuk Rotterdam) Rencana Mogok pada 4 September, Penanganan Kargo dan Logistik Terancam Terganggu
1 jam yang lalu
3 Pelabuhan Belanda (Termasuk Rotterdam) Rencana Mogok pada 4 September, Penanganan Kargo dan Logistik Terancam Terganggu
Baca Selengkapnya
3 Pelabuhan Belanda (Termasuk Rotterdam) Rencana Mogok pada 4 September, Penanganan Kargo dan Logistik Terancam Terganggu
3 Pelabuhan Belanda (Termasuk Rotterdam) Rencana Mogok pada 4 September, Penanganan Kargo dan Logistik Terancam Terganggu
Menurut imbauan tertanggal 28 Agustus dari perusahaan logistik Beckchoice, serikat pekerja Belanda FNV dan CNV telah menyerukan para pekerja di pelabuhan Rotterdam, Amsterdam, dan Zeeland untuk menghentikan aktivitas penanganan kapal mulai pukul 11.15 hingga 19.00 waktu setempat pada 4 September. Aksi ini merupakan bagian dari kampanye menentang rencana perubahan dan pemangkasan sistem jaminan sosial Belanda. Penghentian kerja yang direncanakan ini dapat mengganggu bongkar muat kargo, penundaan kapal, serta operasi terkait, sehingga menunda jadwal kapal, pengambilan kargo, dan transportasi lanjutan. Sebagian gangguan dapat berlanjut setelah masa mogok, dengan tingkat keparahan bergantung pada partisipasi pekerja dan operasional masing-masing terminal.
1 jam yang lalu
Persediaan Aluminium LME Tetap di 246.700 mt, Turun 6,68% Sepanjang Bulan
6 jam yang lalu
Persediaan Aluminium LME Tetap di 246.700 mt, Turun 6,68% Sepanjang Bulan
Baca Selengkapnya
Persediaan Aluminium LME Tetap di 246.700 mt, Turun 6,68% Sepanjang Bulan
Persediaan Aluminium LME Tetap di 246.700 mt, Turun 6,68% Sepanjang Bulan
[SMM Kilat Aluminium] Pada 1 September, inventaris aluminium LME tercatat 246.700 mt, tidak berubah dari hari sebelumnya. Selama seminggu terakhir, inventaris aluminium LME turun 100 mt, penurunan 0,04%. Selama sebulan terakhir, inventaris aluminium LME turun 17.700 mt, penurunan 6,68%.
6 jam yang lalu
Waran Berjangka Aluminium SHFE Turun 9,20% dalam Seminggu, 25,56% dalam Sebulan
6 jam yang lalu
Waran Berjangka Aluminium SHFE Turun 9,20% dalam Seminggu, 25,56% dalam Sebulan
Baca Selengkapnya
Waran Berjangka Aluminium SHFE Turun 9,20% dalam Seminggu, 25,56% dalam Sebulan
Waran Berjangka Aluminium SHFE Turun 9,20% dalam Seminggu, 25,56% dalam Sebulan
[SMM Kilasan Aluminium] Pada 1 September, waran berjangka aluminium SHFE tercatat 238.373 mt, turun 3.321 mt dari hari perdagangan sebelumnya. Selama seminggu terakhir, waran berjangka aluminium SHFE turun 24.141 mt, penurunan 9,20%. Selama sebulan terakhir, waran berjangka aluminium SHFE turun 81.851 mt, penurunan 25,56%.
6 jam yang lalu