On April 25, at the 2024SMM (19th) Aluminum Conference and the First Aluminum Industry Expo - Aluminum Plate, Strip and Foil Industry Development Forum hosted by SMM, Qu Jianhui, senior analyst of SMM aluminum products, said that from the perspective of production time, almost all of the aluminum plate, strip and foil projects currently under construction will be completed before 2025, and 2024 will be the most concentrated, and it is expected that more than 2.4 million tons of new production capacity will be put into operation in 2024.
Plate strip foil
The growth rate of star products was less than expected
According to SMM survey statistics, the output of aluminum strip in China in 2023 will be about 12.408 million tons, with a decrease of about 492,000 tons. The output of aluminum foil was about 4.464 million tons, a decrease of about 286,000 tons. Most of the reductions came from small and medium-sized enterprises in Henan, Jiangsu and Zhejiang.
In terms of products, in 2023, packaging materials such as cans, aluminum foils, double-zero packaging foils, and other packaging materials will decline especially significantly in 2023 after losing the support of overseas markets. The output of battery foil and other products is growing, but the growth rate is not as expected.
In 2024, due to the strong uncertainty in terminal fields such as construction, the output of aluminum strip may still have negative growth, and aluminum foil is expected to return to positive growth driven by food packaging foil, battery foil and other products.
The construction sector has become the biggest variable in the future demand for aluminum plates, strips and foils, and we should continue to pay attention to the performance of real estate completion, infrastructure and old city renovation to drive the demand for aluminum.
Capacity under construction is coming one after another
According to SMM research statistics, there are currently 30 aluminum plate, strip and foil projects under construction in the country, with a total design capacity of 4.71 million tons, and there are still many projects to be clarified.
In terms of products, battery foil and recycled aluminum strip have become the main force of new projects. Of the 30 projects, 13 are related to battery foils, with a total design capacity of 1.1 million tons. A number of enterprises have laid out recycled aluminum strips, with a total design capacity of 1.57 million tons of related projects.
From the perspective of production time, almost all of the aluminum plate, strip and foil projects currently under construction will be completed before 2025, and 2024 will be the most concentrated, and it is expected that more than 2.4 million tons of new production capacity will be put into operation in 2024.
From the perspective of enterprise scale, almost all the production capacity under construction is owned by large enterprises. The production capacity concentration of the aluminum plate, strip and foil industry is gradually rising.
In terms of regions, most of the production capacity under construction is concentrated in Henan, Jiangsu, Zhejiang and other provinces with large aluminum plate, strip and foil production capacity. The new aluminum plate and strip projects are relatively concentrated in Henan, and the new aluminum foil projects are relatively concentrated in Jiangsu and Zhejiang.
The pace of demand recovery remains to be seen
Restricted by the lack of demand for cans, single zero packaging foils and other products, the operating rate of the aluminum plate, strip and foil industry will rise and fall from 2022 onwards, and will stop falling flat in 2023 but has not yet begun to rise.
In 2023, the total export volume of aluminum strip will be 2.773 million tons, and the export volume of aluminum foil will be 1.309 million tons. After about a year of decline, the export trend of aluminum strip and aluminum foil from the second half of 2023 will turn from falling to flat, although it has not continued to decline, but it has not yet shown a clear recovery signal.
Cans (76061220) accounted for a large proportion of the strip and became the main factor for the previous decline. Among the foils, the export of double zero foil (76071110, 76071120) fell slightly, and the export of backing aluminum foil (76072000) and single zero foil (76071190) decreased greatly. In 2024, the export volume of several products is expected to recover year-on-year, but the recovery is expected to be limited.
In 2024, the operating rate of the industry is constrained by the centralized landing of new production capacity, and it is expected to be difficult to rise to a high level. The decline in the inventory of overseas customers in the export market coincides with the ups and downs of trade frictions, and the uncertainty is extremely strong.
The global carbon reduction attitude is firm
Carbon reduction
Choosing low-carbon raw materials is the best way for plate, strip and foil enterprises to reduce carbon emissions
The raw material part is the largest part of carbon emissions in the production process of aluminum plate, strip and foil, as high as 85%-95%.
Increasing the proportion of green aluminum and recycled aluminum is one of the most effective ways for plate, strip and foil enterprises to reduce carbon emissions.
The carbon reduction effect of recycled aluminum is better than that of green aluminum, but there are fewer high-quality recycled aluminum, and the treatment is more difficult.
future
Resources are king
At present, the scrap aluminum resources in East China and South China are the most abundant, and the production capacity distribution of aluminum plate, strip and foil is highly overlapping.
In 2023, China's total output of aluminum ingots (unalloyed molten aluminum) will be about 12.07 million tons, and the top five provinces/autonomous regions are Xinjiang, Yunnan, Inner Mongolia, Gansu and Shaanxi. In addition, the output of aluminum ingots in Henan, Guangxi, Qinghai and other places is also relatively high.
At present, Yunnan, Sichuan, Qinghai and other places are relatively abundant in green power and aluminum resources, in addition to Gansu, Ningxia, Xinjiang, Inner Mongolia and other places have strong potential for green power and aluminum.