Aluminium Extrusion Industry: Overview and Outlook

Time:01 January 2009 Font size

Both the output and sales volumes within China’s aluminium extrusion industry have been rising rapidly in lock step with the country’s rising infrastructure investments and accelerating pace of industrialisation in recent years. , Today China is the world’s largest manufacturer and consumer of aluminium extrusion products. After 10 years of dynamic growth, China’s aluminium extrusion industry is now entering a new era marked by a host of novel developmental trends.

Impressive Growth Prospects From Wider Applications of Industrial Aluminium Extrusion Products 

In 2009, there were totally 2,200 enterprises in approximately 95 countries and regions worldwide capable of producing aluminium extrusion products. China topped the list as the largest producing country accounting for 50% of the world’s total production capacity. 

Driven by economic growth and expanding product applications, global consumption of aluminium extrusion products surged from 8,960 kilotons in 2001 to 15,500 kilotons in 2009, representing a CAGR of 7.5%. This figure is projected to rise to 16,690 kilotons in 2012.

The industry’s landscape showed variable growth patterns in different regions from 2001 to 2009. While consumption in China as a percentage of the world’s total continued to climb, declining trends were seen in Europe and North America.  In 2009, China accounted for 47% of the world’s consumption total versus 21%, 8% and 6% in Europe, North America and Japan respectively.  China is now the world’s largest consumer of aluminium extrusion products.

At present approximately 30% of the aluminium extrusion products in China are for industrial use. They are widely applied in transportation (including the production of automobiles and railways), equipment and machinery manufacturing as well as in the durable consumer product sectors (including light industry). These categories accounted for 10%, 10% and 12% respectively of China’s total consumption of aluminium extrusion products.  Compared with Europe, North America and Japan where industrial usage of aluminium extrusion products rose to as high as 60%, 55% and 40% respectively, China still lags behind in terms of production, product development and application of industrial aluminium extrusion products. The implications of this point to immense potential for future growth and profitability.

Consumption of industrial aluminium extrusion products is expected to see continued growth over the next 5 to 10 years with the proportion as a percentage of total aluminium extrusion products projected to rise from 30% at present to 45% to 50% by 2015. It is expected to further increase to 70% over the next 10 years, according to strategic planning carried out by the Chinese government.

More importantly, developing the industrial aluminium extrusion business will enable enterprises to reap economic benefits and at the same time raise their social awareness and corporate responsibilities.  Today because the production and sales costs of construction aluminium extrusion profiles are relatively transparent, the products themselves have limited added-value and consequently lower margins.  By switching to industrial aluminium extrusion products, enterprises will be able to lift their profit margins by at least 20% to 30%.  In addition, the low-carbon emissions and environmentally friendly characteristics during the aluminium extrusion production processes are in complete harmony with the country’s stated mission of promoting light-weight product development to help save energy and reduce harmful emissions.

An Industry Supported by National Policies

 Consumption of industrial aluminium extrusion products is expected to surge over the next few years with mid-to-high-end products taking centre stage.  Currently in the midst of rapid industrialisation, China will soon emerge to become a mid-level developed country and ultimately realise its goal of being a truly developed country in 20 to 30 years’ time. Aluminium extrusion products, which have enormous potential for industrial applications, will play a key role in this economic transformative process. Among the country’s existing 124 industrial sectors, 113 (or 93%) use aluminium products.

To counter the present low usage of industrial aluminium products in China, relevant government departments have issued guidelines on the consumption structure of aluminium extrusion profiles.  In the “Notice on Guiding Opinions for Accelerating Aluminium Industrial Restructuring” released by the National Development and Reform Commission and nine ministries and commissions, including the Ministry of Finance, one of the objectives of the structural adjustment of the aluminium industry is to increase the proportion of high value-added processed products to achieve a 70/30 ratio between industrial aluminium extrusion profiles and construction aluminium extrusion profiles.

Light-weight development within the transportation industry coupled with the development of electric power engineering and machinery equipment industries have spurred broader applications of aluminium extrusion products across China. Today there are rising demands for medium and high strength industrial aluminium extrusion profiles as well as tube and bar products. Over the next few years, the proportion of industrial aluminium extrusion profiles in aluminium extrusion products is expected to increase from approximately 30% at present to around 45% and 50% in 2015, gradually becoming the dominant product category on the market.

Due to the light-weight, low-price and recyclable characteristics of aluminium products, aluminium extrusion profiles will reap tremendous market opportunities in the transportation, home appliances, electronics and machinery equipment sectors given the country’s current emphasis on energy savings and environmental protection.

Citing the automobile sector as an