SHANGHAI, Mar 21 (SMM) - Domestic new secondary aluminium capacity stood at 1.85 million mt in 2021, including 1.17 million mt of secondary aluminium casting alloy, and the total installed capacity amounted to 11.96 million mt, according to SMM statistics. However, due to the shortage of chip supply across the downstream, as well as the impact of the dual control on energy consumption, and on the back of large aluminium alloy ingot imports, the average operating rate of secondary aluminium in 2021 fell to 44.7%, down about 4.2 percentage points compared with 2020.
A total of 1.8 million mt of secondary aluminium capacity is expected to be added in 2022, of which about 870,000 mt will be secondary aluminium casting alloy production capacity, representing slower growth than in 2021. In recent years, as the consumption of automobiles has encountered bottlenecks, the traditional secondary aluminium casting alloy market becomes increasingly competitive because the downstream consumption is highly dependent on the consumption of traditional fuel vehicles.
In addition, the newly produced new energy vehicles have higher requirements for aluminium alloy performance due to power system changes and weight reduction demands, and they mostly use primary aluminium alloy as the large-scale retirement period is still at least 5-8 years away. The consumption of traditional aluminium casting alloy may stagnate or even retreat.
On the other hand, in light of the ceiling of allowed aluminium production capacity and the increase in overseas awareness of green circular economy, aluminium scrap is becoming an increasingly important raw material for the production of wrought aluminium alloy. At present, products that are making relatively fast progress include construction material, aluminium frame system, pop-top can and some 1/3/5/6 series aluminium plate/sheet. Large aluminium fabricators such as Mingtai Aluminium, Nanshan Aluminium have started to step into the secondary aluminium market. There was about 680,000 mt of new secondary wrought aluminium alloy capacity in 2021, and the number is expected to rise to 930,000 mt in 2022.
(unit: 10,000 mt)
From the distribution of new production capacities, in addition to the places like Jiangxi where preferential tax is in place, Henan, Guangxi, Anhui, Yunnan, etc. are also welcomed by the market, which is also related to the adjustment of relevant local tax policy. Meanwhile, Jiangxi has been overwhelmed by production expansion plans, and highly concentrated capacity will give birth to changes in the supply of raw materials and preferential policies, which is also one of the concerns for new aluminium production capacities.