Extract from “Newsletter of Aluminum Fabrication Industry & Market”
China's aluminum processing industry has made great achievements in the "Eleventh Five-Year" period. The size of the aluminum industry has been increasing and the level of modern technology and equipment has been improving significantly. However, there is still a big gap in some aspects when compared with other powerful aluminum processing countries in the world. This article aims to summarize the "Eleventh Five-Year" and look forward to "Twelfth Five-Year". During this period, under the Aluminum industry's efforts, China's aluminum processing industry has transformed from being large into robust.
Accomplishments of the Aluminum processing industry during "Eleventh Five-Year"
China's total output of processed aluminum products in 2000 amounted to only 2 million tons, 10 times less than the 20.26 million tons in 2010. During the "Eleventh Five-Year" period, the production output of aluminum in China increased by an average rate of 29.75%. China was the only region to achieve high global growth under the influence of the global financial crisis in 2008 and 2009.
China's aluminum processing industry has made a number of important scientific and technological achievements in the "Eleventh Five-Year" period, thereby driving industrial upgrading and new product development. Driven by technological progress, aluminum materials no longer rely on long-term imports to achieve localization, a problem that had never been solved in the past. The materials including large industrial aluminum extrusion products, ultra-thin aluminum foil under 0.005MM for electrolytic capacitors and high precision aluminum sheet (including the tandem cold rolled can materials, PS plate base, foil materials, etc).
Hot rolled narrow aluminum sheets for use in cans and ultra-thin aluminum foil under 0.005MM for electrolytic capacitors are the representative new products of the aluminum processing industry during the period of "Eleventh Five-Year". Scientific research and new product development have made important progress. Representative projects include a large, vacuum, high-strength industrial aluminum extrusion products. During the "Eleventh Five-Year" period, other scientific research results of China's aluminum processing industry include: development of military grade aluminum alloys, large aluminum extrusion tools and die sets and production of research and development applications, high-performance aluminum and aluminum alloy grain refinement, etc. China has completed 5 multi-rack hot rolling production lines; there are some more production lines under construction. These projects have greatly improved the production quality of the high-precision aluminum sheets. China has completed unified deployment for the thick-aluminum plates and aluminum alloys with special features and specifications for a large aircraft project. The development work is in progress according to schedule.
Now, there are almost a hundred medium and large projects under construction for aluminum processing, with a total investment of nearly 200 billion yuan. There are more than 50 projects of flat rolled products under construction, with a total investment of 110 billion yuan. There are more than 40 projects of extrusion products under construction, with a total investment of more than 80 billion yuan. For the extrusion products, most are industrial materials, representative projects such as large extrusion projects by Liaoning Zhongwang Group.
In terms of product structure, the proportion of high-precision aluminum foil material and various industrial aluminum extrusion products of aluminum processing is increasing; and in terms of technical structure, the energy-saving short flow continuous casting process is being promoted. Two-person Taiwanese style rolling mill machine is out of the market. The regional disparities level of development of aluminum processing is getting narrower, except the Pearl River Delta, Yangtze River Delta and Bohai Rim. The aluminum processing industry in the central and western regions is developing.
Business is expanding and industry concentration has been increasing continually. Emerging in China at present are a number of large-scale, influencing, and competitive enterprises of aluminum extrusion products, plates, sheets and foil, etc. The representative companies of industrial aluminum extrusion production include: Liaoning Zhongwang, Jilin Midas, Shandong Conglin, Shandong Nanshan, Fujian Nanping and so on. The representative companies of aluminum plates and sheets include: Southwest Aluminum, Chinalco Northeast Light Alloy, Nanshan Light Alloy, Henan Mingtai and so on. The representative companies of aluminum foil include: Xiashun, Hangzhou Wuxing, Changshu Aluminium, Kunshan Aluminum, etc. For the development of aluminum materials, the representative companies responsible for invention and development of new aluminum products and national defense missions include: Chinalco Northeast Light Alloy, Southwest Aluminum and Northwest Aluminum. The representative companies of the equipment research and design of the processing and manufacturing of aluminum include: China Nonferrous Metals Processing Technology, Zhuoshen, Sinosteel Xi’an Machinery, Taiyuan Heavy Machinery, Shanghai Jieru, etc.
The disparity of domestic aluminum processing is mainly reflected in the technology aspect:
1. Processing technology and technology is relatively backward. The capacity of high-precision product processing is insufficient. It still faces difficulties to produce high-precision products even if imports are increased to improve the installed capacity level.
2. The disparity of product quality control systems and quality testing technology. Foreign quality control has completely reached modernization, automation and information.
3. The design and manufacturing standards of equipment and instrument is still relatively low. The current industry-wide standard of installation is fairly high, but high-precision devices and control instruments mainly rely on imports.
4. The main difference is that enterprises lack of independent innovation. The development of high-precision products has been seriously lagging behind. The long-term problem of exporting affordable products and importing high-precision products is not yet been solved.
Changes in the way of economic development bring new opportunities
The acceleration of the transformation of economic development is a profound change, and it must come with the economic and social developments running through on all fronts.
As an important measure in the transformation of economic development, China will develop strategic new industries in the future. Seven industries which are a clear priority to support are: 1. energy saving; 2. a new generation of information technology; 3. bio-engineering; 4. manufacturing of high-end equipment; 5. new energy; 6. new materials; 7. new energy vehicles. These seven new industries are closely related to non-ferrous metal industry. The relationship between aluminum and aluminum alloys with aviation and aerospace, energy resources, information technology, transportation, heavy equipment manufacturing, etc., is crucial. Therefore, the development strategies of new industries in China will bring new development opportunities for aluminum processing.
"Non-ferrous Metals" in "Industrial Policy Adjustments Directory" of National Development and Reform Commission in 2011, explicitly encourages "the main load-bearing structure of transportation with a new high-strength, high toughness, corrosion resistant aluminum alloy and the large-sized products." Non-ferrous metal processing, especially aluminum processing has become the hot spot for social investment in recent years. However, since the aluminium investment boom was caused by the development of rail transport, it should be given particular attention and positive comments.
Construction of rail transit injects vitality into the development of industrial aluminum extrusion products
High-speed Rail: As of 2009, there are 6552 km of operating mileage for China's high-speed railway. With 773 high-speed trains operating each day, China is ranked as No. 1 in terms of the number of route services in the world. According to the national long-term railway network plan laid out previously, there will be 42 high-speed railways built in 2012 with a total mileage of more than 13,000 km and will reach 16,000 km in 2020.
Subway: Built on the foundation of railroads in cities such as Beijing, Shanghai, Guangzhou and Shenzhen, there are as many as 25 planned urban rail transport (subway and light rail) projects with a total of 5,000 kilometers of planned mileage that have recently gained national approval. Taking into account that the domestic high-speed rail may successfully tender overseas high-speed rail projects as well as the demand for local urban rail transport construction, experts predict China's aluminum extrusion product industry will usher in new market heights in 2020-2025.
Fueled by the rail transport construction, Industrial aluminum extrusion product has become a new investment hot spot. The procurement, design and manufacturing of large aluminum extrusion presses are in full swing. There are more than 50 units of large extrusion presses in operation or under construction in China in 2010, which amount to more than 5,000 tons and are distributed in more than 20 companies, split between domestic and overseas. The production capacity is 70,000 tons per year. There are 8 units of heavy extrusion presses with more than 8,000 tons in operation. Heavy extrusion presses of over 8,000 tons will increase to 23 units in 2012, the production capacity will be 210,000 tons per year.
China accounts for 50% of the world’s large extrusion presses used in aluminum processing, ranking first in the world. The industrial aluminum extrusion product investment boom promoted by the development of rail transport investment facilitates the advanced productive development of industrial aluminum in China. It helps the products upgrade, improve the level of equipment and enhance industrial concentration.
(Editor's note: As a commitment to the field of transportation of high value-added aluminum extrusion products, Zhongwang Group ordered a 125MN dual action aluminum extrusion press which is the largest in the world in 2002. It attracted the attention of the global aluminum extrusion product industry. There will be up to 21 units of world-class large-scale extrusion equipment of more than 75MN in operation within the next two years. The Group will no doubt become the manufacturing company of research and development of industrial aluminum extrusion products which owns the world's largest number of advanced large-scale equipment. Zhongwang’s production capacity will rank first in the world, staying far ahead of its global major competitors.)
Authorities also said that China is still spending huge sums to support rail transport construction in the "Twelfth Five-Year" period. The total amount of aluminum used in train carriages is not big, only 100,000 tons including motor trains and subway. And this demand was periodic with the continuity and stability of annual usage and annual growth rate are poor. Experts estimate that the aluminum extrusion production capacity of the national rail transport under construction is about 300,000 tons in total. It is far more than the current annual market demand of 100,000 tons. In addition, according to statistics, the total demand for aluminum for use in aviation for different type of aircraft worldwide, including the aircraft being developed in China for both passengers and cargo, is 600,000 tons annually. The type and amount of aircraft that China can produce is not much due to the high performance requirements.
The expectation and development of aluminum processing industry in "Twelfth Five-Year"
There are six aspects of technology improvement for China’s aluminum processing: improvement of the material performance, development of new alloys and new materials, processing innovations of a short process and continuous process, low-cost manufacturing; localization of large-scale processing equipment and improvement of technology of equipment mold and other auxiliary devices, green processing – energy-saving, material-saving, harmless and emissions-reducing.
The main directions for new product development of China's aluminum material are: Special precision, features, types, large, thick, thin and environmental friendliness. To improve the physical quality of aluminum products, the promotion of new technology is very important. The "Twelfth Five-Year" plan of aluminum industry describes in detail the essential points of technology development for aluminum processing.
The key projects of the aluminum industry during "Twelfth Five-Year": high-strength aluminum alloy for use in 380km/h vehicles, large thick aluminum alloy plates; aluminum alloy sheet for use in automobile; aluminum alloy composite materials for heat transfer; aluminum alloy plates used for ships; aluminum materials for solar panels. The expectation of development of aluminum processing industry during "Twelfth Five-Year" is as follows:
1. At the end of "Twelfth Five-Year", aluminum processing capacity will reach 40 million tons and aluminum processing output will reach 32 million tons in 2015. The gap between capacity and output is due to the fact that market’s growth in consumption is lagging behind the boom in investment in capacity growth.
2. The ratio of flat-rolled materials and extrusion products will reach 5:5.
3. The ratio of industrial aluminum extrusion products and construction aluminum extrusion products will reach 5:5.
4. The ratio of short casting process and traditional hot rolling process will reach 5:5 in the production of flat rolled products.
5. The main varieties of high-precision, high value-added plates with self-sufficiency rate will reach 70%.
6.Use of liquid electrolytic aluminum in casting processed blanks and implementation of casting reaches 40% of total processed blanks
7. The proportion of recycled aluminum and primary aluminum resources will be 3:7 of aluminum processing resources.
8. Promotion of energy-saving technology on a large scale, make the aluminum process cleaner and more energy-saving. Achieve 100% oil mist recycling of sheet and foil, and zero discharge of materials’ surface sewage.
9. The level of aluminum installation to improve in general, especially significant progress on automatic control technology. Terminate the situation of relying entirely on the import of control technology and equipment.
10. Further increase the industry concentration; further narrow the gap between the regions of aluminum industry development.
The development of aluminum processing in the next five years is a very critical period. If the ten expectations above can be achieved by the end of the "Twelfth Five-Year", it means China realizes its goal of becoming a powerful aluminum processing country in the world is not far.
