Electrolytic aluminum reproduces industry-wide loss analysts expect large-scale production cuts to come

"After this year's ** month, affected by the European debt crisis and other factors, electrolytic aluminum prices have begun to decline and have now fallen to 15,500 yuan per ton, and have fallen into losses in the industry." Xiong Weiping, general manager of China Aluminum Corporation, yesterday at a company restructuring press conference Said, "The electrolytic aluminum company will face the harsh winter again."

After three years, China's electrolytic aluminum industry represented a loss in the entire industry.

"After this year's ** month, affected by the European debt crisis and other factors, electrolytic aluminum prices have begun to decline and have now fallen to 15,500 yuan per ton, and have fallen into losses in the industry." Xiong Weiping, general manager of China Aluminum Corporation, yesterday at a company restructuring press conference Said, "The electrolytic aluminum company will face the harsh winter again."

Although 15,500 yuan/ton is much higher than the lowest price of around 11,000 yuan/ton during the financial crisis, the current situation is very different from three years ago. "At that time, the price of coal and electricity used to produce electrolytic aluminum was very different from that at the moment." Xiong Weiping stressed that at present, the average total cost of electrolytic aluminum in the industry is around 16,500 yuan/ton.

Taking into account the slowdown in price pressure, from December 1st, the National Development and Reform Commission once again raised the price of electricity, the national average sales price of electricity increased by 0.03 yuan / kWh, which further increase the electrolytic aluminum industry losses.

According to estimates of Qi Lei analyst Yan Lei, according to domestic electrolytic aluminum smelting industry, 14500 degrees / ton power consumption estimates, the industry will increase the cost of 435 yuan per ton of aluminum, after the increase in electricity prices, the domestic electrolytic aluminum smelting enterprise tons of aluminum gross margin will be Drop to 235 yuan loss.

This is still a very conservative figure. Zhang Rufeng, a non-ferrous industry analyst from Baichuan Information, told China Business News that the average total cost of electrolytic aluminum in the industry was about 16500 yuan/ton. This is an objective data. Some companies have higher costs. For example, the cost of tons of aluminum in the southwestern region Actually as high as 18,000 yuan, tons of aluminum loss of 2,000 yuan.

Xiong Weiping told this newspaper that from January to September this year, China Aluminum Corporation made a profit of nearly 4 billion yuan, but from the start of profits in October into the downward phase, profits from January to November dropped to more than 3 billion yuan.

The low price has already led electrolytic aluminum companies to reduce. Zhang Rufeng said that since December, the capacity of electrolytic aluminum, which has been cut down due to electricity price increases and other reasons, has been about 630,000 tons, although aluminum smelting companies have had a limited output reduction compared with the current capacity of 21.05 million tons. Prices form a support, but it is expected that there will be a large-scale reduction of such electrolytic aluminum enterprises in the later period.

According to statistics, currently the operating rate of electrolytic aluminum enterprises in the country has dropped to 83.6%, and more than 88% of them have been started before October. “The reasons are that companies cannot sustain production reductions, and there are also factors that delay the start-up time for new production capacity. ."

“At present, it is not the most difficult days for electrolytic aluminum companies.” In Zhang Rufeng's view, because electricity bills are generally booked at the end of the month, the aluminum plant may not be able to truly appreciate the losses caused by rising electricity bills and financial constraints. The company's cash flow is relatively tight. If any firm has fixed assets (or projects under construction), the problem of cash flow will be more severe. It will be the most difficult time for electrolytic aluminum companies.

Zhang Rufeng predicted that the price of electrolytic aluminum still has room to go down, and the next lower point may drop to 14,800 yuan/ton.

The main reason for the low prices is the lack of improvement in downstream demand. The consumption of electrolytic aluminum, the two most important terminals (real estate, automotive), began to decline significantly.

“The domestic electrolytic aluminum plant is facing the attack of the increase in imported electrolytic aluminum and the increase in domestic electricity prices, and a large-scale production cut will come.” Zhang Rufeng said.