SHANGHAI, Nov 4 (SMM) - According to SMM’s preliminary estimates, China’s aluminium plate/sheet and strip output (including aluminium foil stock) will total 12.9 million mt in 2022, a year-on-year increase of 2%, and the output of aluminium foil is expected to be 4.75 million mt, up 3% year-on-year.
The output of can body stock, can end stock and packaging foil is estimated at 1.88 million mt, 500,000 mt and 2.4 million mt respectively, up 11%, 11% and 4%. Driven by robust rigid demand, aluminium plate/sheet, strip and foil for food packaging led the growth of the entire aluminium plate/sheet, strip and foil industry.
The automobile-related aluminium semis sector has benefited from the rapid development of the new energy vehicle (NEV) industry and the general trend of lighter vehicles. The output of auto body sheet is projected to spike 23% YoY to 432,000 mt, and that of auto breezing sheet up 13% to 788,000 mt. The output of battery foil is estimated to soar 111% YoY to 270,000 mt. Considering China's continuous support for the NEV industry and the ramp-up of new capacity, the output of battery foil and auto body sheet will still have growth potential.
In contrast, some products registered negative growth for different reasons. The output of air-conditioner foil is expected to fall 14% YoY to 860,000 mt, that of light gauge foil down 17% to 705,000 mt, and that of electronics foil down 11% to 98,000 mt. The decline in air-conditioner foil output was mainly because the extremely low profit margins prompted many producers to reduce their production. Although the demand for light gauge foil remained strong, some companies have switched their capacity to more popular battery foil, resulting in a year-on-year decrease in the output of the former. The decline in electronics foil production was mainly due to weaker downstream demand.
Looking forward to 2023, SMM predicts that the production of packaging aluminium semis will drop amid the global economic downturn, but the decline will be limited under the support of rigid demand. As the enormous new capacity could increase the risk of overcapacity in the battery foil industry, some battery foil capacity is likely to be switched to light gauge foil. The previous rush to switch from light gauge foil capacity to battery foil has somehow come to an end. Therefore, the output of light gauge foil and battery foil is both likely to rise next year.
