New Deal proposes to expand alternative consumption of aluminum

Recently, the Non-ferrous Metals Industry Association has been busy in rectifying the aluminum industry's capacity loss. The New Deal has proposed to expand the replacement of aluminum consumption in order to achieve wide application of aluminum, energy saving and emission reduction, and 316l stainless steel plates. However, it can only make aluminum prices short-term excitement, and will eventually stay near the cost line.

The New Deal proposed that there are three important ways to expand aluminum applications and promote energy conservation and emission reduction: they are “aluminum substitute steel” for transportation vehicles, “aluminum section copper” for power cable industry, and “aluminum section wood” for furniture. The new policy is essentially to expand the replacement of aluminum consumption, the future of automotive, aerospace, electronics and other materials will continue to increase the amount of aluminum, to the international per capita aluminum consumption is a long-term trend.

At present, the New Deal is difficult to implement and has many problems. However, even if all difficulties can be solved, it will take a long time to change the status quo of aluminum overcapacity. It is generally used only for ordinary wear-resistant processing, and it is difficult to solve the urgent need. More effective policies are needed to change the status quo.

However, the problem of excess aluminium production capacity is imminent, and this alternative consumption will take a long time to be effective.

The aluminum industry will also be in the destocking phase from April to May. In the second quarter, China’s economic growth is still likely to be weak, and downstream effective demand is hard to start. However, monetary policy has slowed its rhythm of tightening due to lower-than-expected inflation growth. In view of the long-term overcapacity in the aluminum industry, it is difficult to ease. In the second quarter, infrastructure projects are difficult to continue to follow due to local finances, and the long-term nature of real estate regulation.

Aluminum has less physical properties such as electrical conductivity and heat dissipation than copper. At present, aluminum tubes or aluminum alloy tubes or copper-clad aluminum wires cannot meet the demands of air conditioning and electricity for heat dissipation and conduction. On the other hand, Tangshan shelf tubes also involve cost issues. By calculation, when the copper-aluminum ratio exceeds 4:1, manufacturers have the incentive to substitute aluminum for copper. As for the transportation vehicles mentioned in the New Deal, “aluminium substitute steel”, we estimate the price of steel plates and the price of aluminum alloys, which are not cost-effective. The driving of vehicles with "aluminum substitute steel" lies in energy saving and environmental protection, as well as reducing the weight of the vehicle itself. For most of the heavy vehicles, they do not have these requirements and weld up to 450 wear plates. Finally, it is even more difficult to implement “aluminum wood” for the furniture industry.