In 2020, domestic electrolytic aluminum output is 37.16 million tons, inventory changes are expected to be basically flat, net imports of primary aluminum are expected to be 1.1 million tons, and apparent consumption is 38.25 million tons, an increase of 5% over the same period last year. Corresponding to the performance of domestic GDP in 2020, 5% of the apparent consumption of primary aluminum is strong. The author believes that there is not only the growth of conventional consumption, but also the help of occasional consumption.
In terms of conventional consumption, aluminum formwork for the construction link of the largest domestic aluminum construction plate and aluminum doors, windows and curtain walls for completion are expected to increase by 1 million tons; secondly, the demand for aluminum for urban rail transit and photovoltaic for the new infrastructure is expected to increase by 550000 tons and 400000 tons respectively. Of course, primary aluminum exports declined significantly in 2020, but organic finished products exports increased significantly to make up for some of the lack of aluminum exports.
In terms of occasional consumption, the epidemic caused a reduction in the supply of waste aluminum and the sale of waste aluminum suppliers caused an upside-down link between the price of refined aluminum and the price of primary aluminum, and the purchase of primary aluminum downstream as a substitute for waste aluminum consumption mainly occurred from April to June last year. The replacement amount of raw aluminum to waste aluminum is about 500000 ~ 550000 tons. Masks as one of the most important epidemic prevention materials, the output of masks in China has increased rapidly with the spread of novel coronavirus epidemic all over the world. China's production of masks is expected to reach 102.5 billion in 2020, an increase of 20.5 times over 2019, according to data from Ai Media Consulting, a research firm. The average aluminum consumption of the nose of ordinary masks is about 0.3g/, while that of medium and high-grade masks is only 0.6g/. According to the 6:4 pattern, the average aluminum consumption of masks is about 0.4g/, and the aluminum consumption of the mask industry is estimated to be 41000 tons in 2020. In addition, the domestic flood control situation in 2020 is grim, and the demand for aluminum flood control baffle increases, which also constitutes the occasional demand for aluminum. It should also be noted that the V-shaped reversal of aluminum price and the replenishment of each link of the industrial chain are difficult to evaluate in quantity, but they do exist and contribute to consumption.
From finished products to primary products
In response to the impact of the novel coronavirus epidemic on the economy, major central banks around the world have expanded their tables, exceeding the level of the global financial crisis in 2008. Unlike injecting liquidity into financial institutions during the 2008 financial crisis, overseas pays more attention to direct subsidies to residents and enterprises, driving overseas social sales back to pre-epidemic levels. However, due to the constraints of the epidemic, the industrial output of most overseas economies did not recover from the same period last year, which in turn gave rise to a strong import demand for finished products. China has made up for this part of the overseas output gap with complete industrial facilities and strong production capacity, corresponding to the explosion of domestic apparent demand for industrial raw materials, while the export of primary products has declined significantly. From January to November 2020, the total export volume of China's import and export trade totaled 16.12 trillion yuan, an increase of 3.65 percent over the same period last year, of which total exports of mechanical and electrical products totaled 9.57 trillion yuan, up 5.4 percent from the same period last year. The export volume of China's primary aluminum products has decreased significantly. From January to November 2020, the export of unwrought aluminum and aluminum products is 4.404 million tons, and the export volume is expected to be 4.85 million tons in 2020, nearly 900000 tons lower than 5.73 million tons in 2019.
Looking forward to 2021, the United States, the United Kingdom and other economies have already begun vaccination, and the popularity of high-probability vaccines in the first half of this year will help to repair overseas industrial output. at that time, overseas demand for finished product imports will weaken, while demand for primary products will pick up. In 2021, China's unwrought aluminum and aluminum exports are expected to repair to the pre-epidemic level. at the same time, considering that the internal and external price is still high to curb aluminum exports, the annual export volume is expected to be about 5.5 million tons.
Incremental continuation of aluminum for completion and construction
The aluminum used in the building plate can be roughly divided into doors and windows at the back of the building, aluminum for curtain walls and aluminum for formwork in the construction process. The former observation dimension has the relevant data of real estate investment and the promotion of the state-led "shed reform" and "old reform" projects. the latter is from the real estate construction area growth rate and permeability observation.
Since 2017, the growth rate of domestic real estate completed area has lagged far behind that of new construction area, and development enterprises have lengthened the development cycle. Since June 2019, real estate development investment has paid more attention to the construction project, and the completed area has been compensated for a time. In 2020, the epidemic caused the data to reach a cliff in February and March, while the completed area actually turned to positive growth in October. In 2020, real estate completion does provide an increase for domestic aluminum consumption. As the construction area continues to transmit to the completion, the growth rate of the completed area is expected to cross the zero axis, and the demand for aluminum is expected to increase by 300000 tons.
In 2017, the old reform entered a trial period. In April 2020, the Politburo meeting proposed to carry out the transformation of old residential areas as a measure to expand effective investment. The "14th five-year Plan" real estate reform policy has shifted from the shed reform to the old one. According to Guangfa Securities's estimate, the potential stock of the old reform will reach 4.82 billion square meters, 5.29 billion square meters and 6.59 billion square meters respectively from 2020 to 2022. The specific content of the old reform roughly includes the building body, infrastructure, community environment, public service facilities and so on. The main industrial materials involved are steel, concrete, pipe, mortar, paint, cable, valve, waterproof roll material, plastic steel window, sand, cement, building brick, wood, insulation board and so on. Although the old reform carried out at the national level does not directly involve the demand for aluminum, the promotion of the old reform project will give rise to the demand of households to replace doors and windows, which in turn will lead to an increase in the demand for aluminum consumption.
In May 2020, the "guidance on promoting the reduction of Construction waste" issued by the Ministry of Housing and Construction pointed out that the reuse of temporary facilities and turnover materials should be improved, and the promotion of turnover materials such as aluminum formwork should be encouraged. From the central to the local level, the policy promotes the full release of the development potential of aluminum templates and accelerates the promotion of the application of aluminum templates. According to the statistics of China Formwork Scaffold Association, by the end of August 2020, the national aluminum alloy formwork market has about 78 million square meters (including non-standard templates). If the weight of aluminum formwork is measured by 20kg~25kg per square meter, the scale of aluminum stock in the market is about 2 million tons. According to a survey of relevant companies, the market is expected to grow by about 15 per cent next year, with demand for aluminium growing by about 300000 tons.
The increment of aluminum for photovoltaic is 500000 ~ 600000 tons.
The promotion of the strategic status of renewable energy planning in various countries, such as the European Union has raised its greenhouse gas emission reduction target by 2030 from 40% to 55%; Biden of the United States has been elected president to strengthen support for new energy policies; China strives to achieve a peak of carbon emissions by 2030 and carbon neutralization by 2060, putting forward new requirements for the transformation of energy structure and power supply-side structural reform. the proportion of low-emission or even zero-emission non-petrochemical energy (hydropower, nuclear energy, photovoltaic, wind power, biomass) needs to be greatly increased, and the investment income of photovoltaic projects with steady decline in power generation costs will be more attractive. the demand for photovoltaic installation will show a trend of acceleration in the future.
In 2020, the impact of the epidemic on overseas large power station projects under construction is relatively limited, and the impact on European and American users and other distributed projects is also quickly digested. It is expected that 15GW~20GW installation projects will be postponed every new year, and the global photovoltaic installation scale is expected to reach 118GW in 2020. The installation delay will lay the foundation for next year's demand recovery, and it is expected that the global photovoltaic installed 155GW~190GW will be increased around 2021-2022.
More than half of the overseas photovoltaic modules are provided by China's exports. According to Solarzoom estimates, from January to September 2020, the export scale of China's photovoltaic modules will reach 53GW 55GW, and the same period in 2019 will be 52.7GW. It is expected that the annual export scale will reach 75GW, which is about 8GW more than the export scale of 67GW in 2019. From an incremental point of view, the new overseas installed capacity in 2021 is about 20GW compared with that in 2020. With 70 per cent of the overseas market, the export share of pulling components is estimated to be 14GW, and the increase of aluminum consumption is expected to be 280000 tons.
On the domestic side, after the last big exam of the "531" policy in 2018, the photovoltaic industry officially entered the transition period from subsidy to parity from 2019 to 2020, and the project kilowatt-hour subsidy intensity was determined in the form of market-oriented competition on the Internet, and the average kilowatt-hour intensity decreased from 0.06-0.07 yuan / kWh in 2019 to 0.03-0.04 yuan / kWh, in 2020 to non-subsidy parity in 2021. In 2020, the reserve size of the photovoltaic parity project will be about 50GW, providing strong support for the installation in 2021. From January to September 2020, the newly installed photovoltaic capacity in China was 18.7%, an increase of 16.9% over the same period last year. In the fourth quarter of last year, due to the bottleneck of photovoltaic glass supply and the shortage of auxiliary materials, rush installation may be slightly lower than expected, and the installed capacity is expected to reach 38GW in 2020. With the centralized installation of parity projects in 2021, the domestic photovoltaic installed capacity is expected to reach 50GW 55GW, providing an incremental demand of 240000-340000 tons of aluminum. 2022 will enter the era of parity in an all-round way, and the installed scale may reach 60GW~65GW.
The growth rate of aluminum for urban rail transit slows down.
Intercity high-speed railway and urban rail transit are the main direction of "new infrastructure" in 2020. The growth of urban rail transit operating kilometers has been significantly increased, which has led to a significant increase in the growth rate of urban rail operating vehicles compared with that from 2016 to 2019. It constitutes one of the main plates for the growth of aluminum consumption in 2020. In 2021, the national urban rail will usher in a new round of planning approval, but combined with the project approval and planning, it is expected that the growth rate of urban rail transit operating kilometers will be reduced from 2021 to 2025, and the corresponding growth rate of operating vehicle demand will also decline accordingly. It is estimated that the number of operating vehicles will increase to 55000 in 2020, with an annual supply of 14000 vehicles, an increase of 7000 compared with 6986 vehicles supplied in 2019, usually about 10 tons of aluminum alloy per car and an increase of about 560000 tons per car. Against the backdrop of a high base in 2020, the growth rate is facing a decline in 2021, with an estimated annual supply of 10500 vehicles, a decrease of 3500 vehicles compared with 2020, and a drop of 300000 tons in aluminum demand.
From January to November 2020, car sales in China were 22.47 million, down 2.77 percent from the same period last year, of which sales of new energy vehicles were 1.109 million tons, up 6.34 percent from the same period last year. The China Association of Automobile Manufacturers predicts that total car sales will reach 25.3 million in 2020, down about 2 per cent from the same period last year, of which passenger vehicle sales are expected to be 20.2 million, down about 6 per cent from the same period last year; commercial vehicle sales are 5.1 million, an increase of about 18 per cent over the same period last year; new energy vehicle sales are 1.3 million, an increase of about 8 per cent over the same period last year. Total vehicle sales in 2021 are expected to reach 26.3 million, an increase of about 4 per cent over the same period last year, including 21.7 million passenger vehicles, up about 7.5 per cent from the same period last year, 4.6 million commercial vehicles, down about 10 per cent from the same period last year, and 1.8 million new energy vehicles, an increase of about 40 per cent over the same period last year. China's car sales are likely to grow steadily in the next five years. China's car sales will reach 30 million by 2025. Aluminum consumption in the automobile market is expected to increase by 150000 tons in 2021.
Aluminum demand for Electroweb may shrink
The main aluminum scene of Electroweb plate is steel-cored aluminum strands for high-voltage power transmission and transformation, high-voltage power transmission and transformation projects are approved by national planning, and Electroweb aluminum consumption depends on policy. High-voltage power transmission and transformation is a carrier of the "new infrastructure". In 2020, the State Electroweb will promote the inclusion of three UHV projects, namely, Jinshang hydropower transmission, Longdong to Shandong and Hami to Chongqing, into power planning, which is expected to be approved and implemented in 2021. In the long term, the Local Development and Reform Commission plans to promote the inclusion of three UHV lines in the 14th five-year Plan: Haixi Prefecture in Qinghai, Harbin and Jilin, which is far from the nine lines approved in 2018. As there is no approval for large-scale power transmission and transformation projects in 2020, with the completion of the previous projects, the delivery demand tends to decline. According to the national Electroweb tender data, the delivery volume of Electroweb aluminum-related products fell off a cliff in 2020, with a decrease of 650000 tons compared with 2019. If new high-voltage power transmission and transformation projects are not approved in 2021, the demand for aluminum in this sector is expected to continue to decline by 500000 tons for the whole year.
In 2020, the apparent domestic consumption of electrolytic aluminum was 38.25 million tons, an increase of 5 percent over the same period last year. The domestic output gap was about 1.1 million tons. Overseas primary aluminum imports were supplemented by 1.1 million tons, and the carry-over inventory was maintained at 600000 tons at the end of the year. Incidental consumption and conventional consumption go hand in hand, promoting the higher-than-expected growth of domestic primary aluminum consumption in 2020.
In 2021, taking into account the non-replicability of accidental consumption growth and the change in the incremental structure of electrolytic aluminum consumption, the domestic primary aluminum consumption was reduced to 3%-3.5%, with a corresponding consumption increment of 1.1 million-1.35 million tons and a consumption of 39.4 million-39.59 million tons. The main sectors contributed to an increase of 650000 tons in exports of primary products, 600000 tons in construction, 550000 tons in photovoltaic, 150000 tons in delivery and 500000 tons in Electroweb.
