SHANGHAI, Sep 28 (SMM) - At the fourth SMM China Automotive New Material Application Summit Forum - Automotive Aluminium Extrusion Application and Development Forum, Bai Fan, Director of SMM Consulting Department, made an in-depth analysis of China's automotive aluminium extrusion market and provided some strategic suggestion on investment. Bai believes that with the ongoing development of lightweight automobiles, the penetration rate of aluminium extrusion in the automotive industry will gradually increase in the future, and aluminium extrusion used in automobiles will also take up a larger proportion in the overall industrial aluminium extrusion. The demand for aluminium extrusion applied in the new energy vehicles will explode between 2025 and 2030, and companies are suggested to prepare production lines in advance for related aluminium products.

There is still room for industrial extrusion growth in the market share

The output of construction aluminium extrusion declined in 2021 from the previous year. At the same time, industrial aluminium extrusion recorded a significant growth in output, but it should be pointed out that the aluminium extrusion used in automotive sector accounted for a fairly small share in the industrial aluminium extrusion due to its high requirements on technology. However, with the development of lightweight automobiles, the penetration rate of aluminium extrusion in the automotive industry will gradually increase, and aluminium extrusion used in automobiles will also take up a larger proportion in the overall industrial aluminium extrusion. As the aluminium extrusion industry has started integration, enterprises with scale effect are having increasingly distinctive advantages in the market. Therefore, scale and capital become the important tickets to this industry.

According to SMM forecast, the output of construction aluminium extrusion will show a downward trend as a whole by 2030, while the output of industrial profiles will rise constantly. In particular, the industrial extrusion applied in the new energy vehicles is the most eye-catching bright spot, whose consumption will maintain an annual growth rate of more than 10%.

Aluminium extrusion for new energy vehicles will maintain a high compound growth rate 

The Ministry of Industry and Information Technology has proposed in the "Technical Roadmap for Energy Conservation and NEV Development” that the goal of using aluminium extrusion in manufacturing lightweight cars is to reduce the average fuel consumption per 100 kilometres of traditional fuel vehicles and to increase the average driving range of NEVs. In this way, the power consumption could be reduced significantly. Thanks to the national target to reduce vehicle weight and the rapid development of the new energy industry, China's aluminium extrusion demand from automobile sector is likely to show a continuous upward trend in the next eight years.

SMM estimates that the consumption of aluminium extrusion in automobile sector will maintain a high compound growth rate of 13.1% from 2020 to 2025, while the compound growth rate will inch lower during 2025-2030 to 11% due to the increasingly stronger extrusion effect of aluminium castings.

SMM believes that with the rapid development of new energy vehicles, the consumption of aluminium extrusion in the new energy vehicles will gradually overtake that of traditional fuel vehicles, and aluminium extrusion will enjoy the greatest popularity in the market.

Analysis of the production cost of aluminium extrusions applied in automobiles

Aluminium extrusion applied in automobiles includes the assembly of door sill beams, front and rear bumper beams, longitudinal beams, door bumper beams as well as battery tray assembly etc. The production costs are moderately related to the alloy type, material cross-sectional area and extruder tonnage. The processing cost of battery tray is the highest owing to its complexity, which mainly stems from the frame manufacturing. Moreover, the battery tray and some door sill beams will need surface treatment, which also adds to the costs. 

Therefore, SMM expects that the demand for aluminium extrusion applied in the new energy vehicles will explode between 2025 and 2030, and the companies are suggested to prepare production lines in advance for related aluminium products. It should be noted that the casting process will have a certain impact on the extrusion process, but thanks to the rapid development of the new energy industry as a whole, the impact will be rather limited.  In addition, enterprises should also pay attention to production capacity, capacity expansion and order match.