The reporter learned from the China Nonferrous Metals Industry Association on the 11th that China's large-scale electrolytic aluminum enterprises actively fulfilled the promises of production reduction reached last year. As of January 10, 17 companies have started to reduce production and cumulatively reduce production capacity by 335,000 tons.
On December 1, 2005, 23 large-scale electrolytic aluminum enterprises held a forum in Beijing and unanimously agreed to reduce production by 10% initiatively and prepare for further production cuts according to market conditions to resist excessive alumina prices since 2002.
After the news of production cuts was announced, electrolytic aluminum companies quickly put into action. According to statistics from the China Nonferrous Metals Industry Association, currently 17 of the 23 companies have already reduced production, the rate of production cuts are all above 10%, cumulative reduction of production is 335,000 tons, and another 380,000 tons of new production capacity has been suspended.
According to a reporter from the China Nonferrous Metals Industry Association’s Deputy Director of Industry Coordination Department, Documentary Jun, 23 electrolyzed aluminum enterprises have a production capacity of 6 million tons, accounting for about 55% of the total production capacity in China. They began to reduce production on alumina and electrolytic aluminum markets at home and abroad. It has a series of effects. At present, the international aluminum price has risen to more than $2,320/t, hitting a 17-year high; domestic prices have also reached more than 19,000 yuan/t. In addition, the spot price of imported alumina stagnated at around US$600/tonne, not only did it not rise further with aluminum prices, but also showed a downward trend. In the future, the price trend of alumina and electrolytic aluminum will depend to a large extent on the actual reduction in production of electrolytic aluminum companies in China.
A person in charge of a large-scale electrolytic aluminum producer who cut production told reporters that the company’s production cuts are entirely voluntary. Everyone hopes that through joint production cuts, on the one hand, the price of imported alumina will be pushed down, and on the other hand, electrolytic aluminum prices will be promoted. According to the characteristics of electrolytic aluminum production, planned production cuts will not bring much losses. This part of the losses can be said to be insignificant compared with the losses caused by the use of high-priced alumina production, and can be completely compensated by promoting the price of electrolytic aluminum. At a media communication meeting held yesterday, a person from China Aluminum Corporation stated that the global alumina production capacity growth was limited in 2006, and demand for electrolytic aluminum is still strong, and alumina prices are expected to remain high.
Chinalco believes that from the information currently available, the global alumina production capacity will increase by about 6 million tons in 2006, and some of the production capacity will be put into production in the second half of the year. Therefore, compared with the current annual global output of 60 million tons, the increase in alumina supply is limited. . At the same time, the demand for electrolytic aluminum in the world, especially in China, will maintain a relatively high growth rate. Therefore, the price of alumina will also maintain a relatively high level.
As the largest aluminium company in the world and the third largest in the world, China Aluminum Corporation produced 7.8 million tons of alumina, 1.4 million tons of electrolytic aluminum, and 410,000 tons of aluminum processing materials in 2005; and achieved a total income of 65 billion yuan in main business during the year. Total profits and taxes totaled 20.5 billion yuan, an increase of 31% and 41% year-on-year, respectively, and a return on net assets of 18.5%, an increase of 2.2 percentage points year-on-year.
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