In recent years, the domestic electrolytic aluminum production capacity ceiling policy and overseas demand expectations have promoted the investment in overseas electrolytic aluminum projects, but how to avoid over-reliance on the coal-fired aluminum model is worthy of serious consideration by industry enterprises.
On April 25, at the 2024 SMM (19th) Aluminum Conference and the First Aluminum Industry Expo - Electrolytic Aluminum and Raw Materials Forum hosted by SMM, Wang Yanchen, Executive Director of SMM London Office, expressed his professional insights on the risks and opportunities of overseas investment in the aluminum industry.
Overseas investment drivers for the aluminium industry chain
The Guinea bauxite project secures the supply of bauxite from the mainland and avoids a repeat of the iron ore mistakes
Indonesia's bauxite export ban has accelerated the progress of mainland companies investing in alumina plants overseas
The ceiling policy on electrolytic aluminum production capacity and the expectation of overseas demand have promoted investment in overseas electrolytic aluminum projects, but it is worth considering how to avoid over-reliance on coal-fired aluminum.
Overseas market protection and environmental protection policies and the domestic market, which is seriously involuted, have promoted the outward relocation of aluminum processing capacity
Overseas aluminum industry investment projects are gradually changing the international trade pattern of the aluminum industry
Risks and opportunities of overseas investment
From aluminium processed products to aluminum-containing end products, overseas markets are very important to the mainland
Driven by overseas industrial protection policies, emerging markets have become the main destinations for the export of processed aluminum products from the mainland
As overseas projects come into operation, the number of evasion investigations against Chinese investors is set to increase
Overseas investment requires a higher capital investment and a longer payback period
Potential risks of overseas investments
Grasp the development trend of the international aluminum industry and look for new opportunities
Aluminum scrap recycling in Europe and the United States has become a hot spot: carbon reduction, energy saving, and low investment
The U.S. Department of Energy is investing $650 million to fund 4 aluminum projects:
• US$500 million Century Aluminum's electrolytic aluminum project
• 7500万美元 Constellium
• 2230万美元 Golden Aluminum
• 6730万美元Real Alloy
conclusion
• Overseas investment in the mainland aluminum industry is in the accelerated stage, and the driving factors of investment are diverse, such as domestic policies, policies of overseas countries and regions, the need for resource security, the intensification trend of trade protection, and the involution environment of the domestic market.
• Unlike domestic projects, overseas investment is risky, including higher capital investment, longer return cycle, and various risks of the host country, financial risk, cyclical risk, environmental protection and local relationship risk.
• Higher risks may also be accompanied by higher returns, overseas investment companies should learn from the experience of other countries at the same time, should gradually get out of the characteristics of overseas investment in the mainland, take into account the short-term interests and long-term interests, take advantage of the rapid development of the mainland economy, the aluminum industry should go out as soon as possible.