The processing cost of aluminum sheet and foil mainly includes the cost of natural gas, electricity, auxiliary materials, machinery depreciation, management expenses and so on. Natural gas is mainly used in the melting process of aluminum coil. The fuel consumption of liquid aluminum coil processing is 60 cubic meters per ton. The processing cost of a ton of aluminum coil in Henan increased by 114 yuan, and that of a ton of aluminum coil in Shandong increased by 178 yuan. Using aluminum ingots as raw materials to process aluminum coil consumes 80 cubic meters of natural gas per ton. The processing cost of a ton of aluminum coil in Henan increased by 152 yuan, and the processing cost of a ton of aluminum coil in Shandong increased by 237 yuan. The rising price of industrial natural gas makes the production cost of aluminum plate and foil enterprises increase significantly.
Henan Province is the largest province in China’s aluminum processing industry. The designed production capacity of aluminum plate and foil enterprises in Henan province is 5.5 million tons, accounting for 35.1% of the national total. The design capacity of Gongyi Huiguo town is 4.17 million tons, Jiaozuo is 150 thousand tons, Zhengzhou is 280 thousand tons.
The operating rate of the country’s leading aluminium downstream processing companies fell 1 percentage point from the previous week to 66.2 per cent. Plate, this week, the leading aluminum belt enterprises operating rate decreased significantly, mainly because of the serious epidemic in the strip town of Gongyi. Many of the towns where the factories were located have been closed, and local companies have been forced to cut production because of slow purchases or delays in getting money back. Aluminum cable board is also affected by the epidemic, Henan and other places on the suspension of power grid construction, the terminal does not pick up goods, resulting in cable plant scheduling decline. The operating rate of other sectors is relatively stable, and the epidemic has not had a great impact on the production of sample enterprises. Among them, the construction of profile enterprises has maintained a stable and rising trend, but the consumption of alloy plate seems to have weakened. In the short term, close attention should be paid to the impact of COVID-19 on the transportation and production of aluminum processing companies in many places.
Primary aluminum alloy: this week the original aluminum alloy leading enterprises operating rate is still 64%. This week, some companies reported signs of weakening orders, the slow season seems to have come early. But leading enterprises have not cut the operating rate. The traditional off-season is approaching, aluminum prices are expected to maintain a wide range of shocks. Market pessimism is quite strong, most operators believe that the future rate of growth is limited space.
Aluminum strip: The operating rate of leading aluminum strip companies fell 5.4 percent to 74.6 percent this week. Recently, Gongyi, the key town of bandwidth, suffered severe epidemic, and many towns where bandwidth factories are located were closed. Many local companies have been forced to cut production because of slow purchases or delays in the return of funds. Leading enterprises generally say that some employees are isolated, and the difficulty of purchasing auxiliary materials leads to a certain decline in operating rate. At present, the reduction rate is less than 20 percent, but if the closed control of the operating rate continues, it may fall rapidly.
With the lower operating rate and the increase of natural gas, enterprises have been unable to absorb the production cost, so that the already struggling aluminum belt enterprises have had to raise the processing fee of 100 yuan per ton. I also hope that downstream enterprises understand that only by working together to overcome difficulties, can we achieve a win-win goal!