SHANGHAI, Nov 25 (SMM) – At present, most domestic secondary aluminium enterprises are secondary cast aluminium alloy enterprises. The production capacity in the top ten secondary aluminium enterprises account for about 46% of the total capacity.
The production capacity is concentrated in Jiangsu, Guangdong, Henan, Zhejiang, Chongqing, and Hebei. The capacities in Jiangsu, Guangdong, and Henan are more than 1.5 million mt respectively, and the capacities in the other three provinces are more than 1 million mt. There are more than 10 enterprises with a production capacity of more than 300,000 mt.
The strength of pure aluminium is low, so it is not suitable for making structural parts that bear load. Adding an appropriate amount of silicon to aluminium can improve the performance. The alloys almost have not heat crack when the proportion of silicon reaches 6%. Silicon reduces the expansion coefficient of the cast alloys and improves the wear resistance of the products. Silicon is widely used in aluminium alloys, and the application rates in aluminium alloys of different grades are different. The total used silicon amount is estimated to be 700,000 mt.
According to customs data, China's aluminium scrap imports in June 2021 were 38,800 mt, up 13.11% month on month but down 36.49% year on year. The imports in H1 2021 totalled 406,700 mt, a year-on-year increase of 4.40%.
The imported aluminium scrap are mainly automobile flotation and polished slices. They are mixtures of aluminium tense and taint, with an estimated silicon content of 5-7%.
The secondary aluminium alloy ingot ADC12 has a silicon content of 9.6-12%, and its prices are lower than that of primary aluminium. The change in silicon prices will make ADC12 prices higher than that of primary aluminium. The costs of silicon-containing products have increased significantly, such as A356.2. The processing fee has increased from 600 yuan/mt to 2500 yuan/mt, and even 4700 yuan/mt. The tense is mainly composed of silicon-aluminium alloys. For a long time, tense prices were lower than taint prices, but the rising silicon prices have pushed up the tense prices. Silicon will become an important factor in determining the value of scrap aluminium, and the secondary aluminium enterprises will value the aluminium scrap purchases and build stable supply channels.
Automobile industry is the largest consumer of secondary aluminium, and application of aluminium in communications industry is growing rapidly. The aluminium consumption by one lightweight automobile gradually increases from 190 kg to 250 kg. Among the aluminium used in passenger cars, cast aluminium alloy accounts for about 60-70% (of which about 70-80% are secondary cast aluminium alloys, mainly silicon-aluminium alloys), and the rest are deformed aluminium alloys.
The pattern of China's aluminium alloy industry is undergoing major changes, and it is at the leading level in the world in terms of industrial concentration and technological level. The changes in the price spread between silicon and aluminium has changed the material structure and pricing model of the silicon-aluminium alloy market. Secondary aluminium application is an important path to achieve the dual-carbon goal of the aluminium industry, and the continuous expansion of secondary aluminium applications will drive up the demand for silicon. The demand for silicon from silicon-aluminium alloys will continue to grow until 2025 and will remain stable after 2025.
![[SMM Analysis] Futures Lack Momentum to Rise Further, Pre-Holiday Demand Stalls, and Stainless Steel Social Inventory Accumulation Intensifies](https://imgqn.smm.cn/usercenter/HBsPu20251217171723.jpeg)
