The electrolytic aluminum production capacity that was discontinued last year began to resume after the Spring Festival.
“As the price of electrolytic aluminum gradually recovers, after the Spring Festival, we gradually resumed production capacity and plan to resume production by 150,000 tons by mid-March.†An insider of Henan Shenhuo Aluminum Company told the “First Financial Daily†yesterday.
The company's total production capacity is 920,000 tons. In October last year, due to energy-saving emission reduction and power-limiting policies, Shenhuo Aluminum's electrolytic aluminum production capacity was reduced by 600,000 tons.
Jiaozuo Wanfang (000612.SZ), which shut down part of its production capacity last year, has also resumed production. Zhao Chen, an analyst at Asian Metals, told this newspaper that after the Spring Festival, Jiaozuo Wanfang began to gradually resume production capacity, and plans to fully resume production capacity in early March. In October last year, Jiaozuo Wanfang issued a notice saying that due to the impact of the restricted electricity policy, the company plans to stop 140,000 tons of electrolytic aluminum production capacity.
Henan is China's largest electrolytic aluminum producing area. Since 2007, the output of electrolytic aluminum in Henan Province accounts for about 1/4 of China's total output. Affected by energy conservation and emission reduction, in the fourth quarter of 2010, nearly 30% of the production capacity in Henan was shut down, and the proportion of production in the national production was reduced to 20%.
In addition to Henan, in the fourth quarter of last year, electrolytic aluminum companies in Shanxi and Guangxi also experienced production stoppages and production cuts.
After the Spring Festival, as the price of electrolytic aluminum gradually increased, enterprises began to gradually resume production. Zhao Chen told this newspaper that the electrolytic aluminum production capacity in Shanxi and Guangxi regions has gradually resumed production. At present, the price of electrolytic aluminum has risen to about 16,500 yuan / ton. Many electrolytic aluminum enterprises have already been profitable, but there are a small number of electrolytic aluminum enterprises. Due to the high cost of electricity, it is still not profitable.
UBS analyst Lin Haoxiang also conducted research. He said that China's electrolytic aluminum production has declined since July 2010. The production started to bottom out in November last year. From March 2011, the electrolytic aluminum production capacity in Henan has been fully resumed. The scale of resumption of production is about 400,000 tons.
China's electrolytic aluminum production capacity is in a state of severe oversupply. Aladdin, an aluminum research institute, expects China's electrolytic aluminum production capacity to be 26.595 million tons in 2011, an increase of 17.62% year-on-year. However, in 2010, China's electrolytic aluminum production was only 15.65 million tons, and a large amount of production capacity was forced to idle.
Last year, aluminum prices were in a downturn for most of the time. Affected by the low aluminum prices last year, some electrolytic aluminum companies suffered losses again. *ST Guan Aluminum (000831.SZ), a subsidiary of Minmetals Group, announced its pre-loss announcement on January 20. Due to losses for three consecutive years, the company is facing a risk of suspension of listing.
Although aluminum prices began to rise after the Spring Festival, it still could not save the loss of *ST Guan Aluminum in 2010. If *ST Guan Aluminum does not make financial adjustments, this year's delisting will be a reality.
However, the increase in aluminum prices has paved the way for Chinalco (601600.SH, 02600.HK) to turn losses. After reducing costs and internal restructuring, Chinalco said that in 2010, it achieved the arduous task of turning losses into losses. Due to the good momentum of aluminum prices this year, Chinalco's profitability is expected to pick up this year.
Lin Haoxiang believes that considering the current production cost of electrolytic aluminum, the range of alumina, prebaked anode and power price fluctuations will not be too large. If the domestically shut down capacity is fully restored in March, the supply and demand of the domestic primary aluminum market will be It has become more accommodative and has created significant pressure on the spot price of China's primary aluminum.
Zhao Chen said: "The current pressure is still not obvious, some aluminum companies said that there is no stock at present."
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