In the first half of the year, aluminum prices of high enterprise automobile / power into aluminum demand two big increases

According to data from Oriental Fortune Choice, as of July 16, 14 of the 26 A-share listed companies in aluminium profile manufacturers in china have released their first-half performance forecasts, of which 13 achieved profits and only one lost money. Compared with the same period of last year, 11 companies achieved positive growth, of which 7 companies including Shenhuo Co., Ltd. and Dongyang Sunshine increased their net profit by more than 100%.

“In the first half of the year, the aluminum price was at a high level in the same period in recent years, and the profitability of aluminum companies was relatively good. At present, the mid-term performance forecast of listed companies in this industry is in line with market expectations.” A non-ferrous industry analyst told the “Securities Daily” reporter that in terms of demand, although The real estate industry, which is a traditional big user of aluminum, has a low prosperity, but the consumption in the fields of automobiles and power has continued to grow, becoming the main responsibility for the increase in aluminum demand.

Aluminum prices run high

A number of aluminum companies are expected to increase their performance

According to public data, since the first half of 2022, the epidemic has repeatedly superimposed the escalation of geopolitical conflicts, causing aluminum prices to fluctuate all the way up. Among them, Shanghai Aluminum once soared to 24,020 yuan / ton, approaching a record high; London Aluminum even hit a new high, up to 3,766 US dollars / ton. Aluminum prices are running at a high level, and many listed aluminum companies have issued announcements of pre-increase in performance.

On July 15, Hongchuang Holdings released a performance forecast. It is expected to make a profit of 44.7079 million yuan to 58.0689 million yuan from January to June 2022, successfully turning losses into profits. The company said that in the first half of 2022, rising aluminum prices at home and abroad, exchange rate fluctuations favoring exports, optimizing product structure, and strengthening cost control are the keys to turning losses into profits for the company.

On July 12, Shenhuo Co., Ltd. issued an announcement on the pre-increase in the first half of the year, and it is expected to achieve a net profit of 4.513 billion yuan in the first half of the year, a year-on-year increase of 208.46%. The reason for the growth of its performance is that in addition to the 900,000-ton project of Yunnan Shenhuo Aluminum Co., Ltd. reaching production, the sharp rise in the price of electrolytic aluminum and coal products is also an important factor.

The aforementioned analysts said that the overall rise in aluminum prices is mainly due to the disturbance of geopolitical conflicts. On the one hand, it affects the supply of primary aluminum, and on the other hand, it pushes up energy prices in Europe, resulting in an increase in the cost of aluminum smelting. Driven by the LME, the profits of domestic electrolytic aluminum companies rose to a high level. According to estimates, the average profit per ton of aluminum in the industry at that time had reached about 6,000 yuan, and the production enthusiasm of enterprises was high, and at the same time, the export of domestic aluminum products was stimulated.

However, after the Federal Reserve aggressively raised interest rates, coupled with the repeated domestic epidemics, both aluminum prices began to fall. Among them, Shanghai aluminum once fell to 18,600 yuan / ton; London aluminum fell to 2,420 US dollars / ton.

Although the  Aluminium Extrusion Profile price in the first half of the year showed a trend of rising first and then falling, the overall profitability of aluminum enterprises was good. Fang Yijing, an analyst at Shanghai Steel Union, told the “Securities Daily” reporter, “From January to June 2022, the weighted average cost of electrolytic aluminum is 16,764 yuan / ton, which is the same as the spot price of Shanghai Steel Union’s aluminum ingots from January to June in that month. Compared with the average price of 21,406 yuan / ton, the average profit of the whole industry is about 4,600 yuan / ton, an increase of 548 yuan / ton compared with the same period last year.”

Real estate downturn

Automobile power has become an increasing demand for “responsibility”

From the perspective of my country’s electrolytic aluminum terminal consumer market, construction real estate, transportation and power electronics are the three most important fields, accounting for more than 60% of the total. In addition, there are applications in consumer durables, packaging and machinery.

According to data from the National Bureau of Statistics, from January to May this year, the national real estate development investment was 5,213.4 billion yuan, a year-on-year decrease of 4.0%. The sales area of commercial housing was 507.38 million square meters, a year-on-year decrease of 23.6%. The housing construction area of real estate development enterprises was 8,315.25 million square meters, a year-on-year decrease of 1.0%. The newly started area of housing was 516.28 million square meters, down 30.6%. The completed area of housing was 233.62 million square meters, down 15.3%. Mysteel statistics show that from January to May this year, the output of aluminum profiles totaled 2.2332 million tons, a year-on-year decrease of 50,000 tons.

“Although the proportion of aluminum used in the construction and real estate industry has dropped from 32% in 2016 to 29% in 2021, the demand for aluminum in transportation, power electronics, packaging and other fields is blooming more.” Fang Yijing believes that, in particular, benefiting from the The trend of new energy vehicles and body weight reduction is significant, and aluminum for transportation continues to rise, becoming the leading force in the growth of aluminum demand. In the context of steady growth, new energy infrastructure is also expected to exert force, and the construction of photovoltaics and power grids may promote the use of aluminum in the electronic power industry to increase significantly.

According to data released by the China Automobile Association a few days ago, with the joint efforts of all parties, the auto industry has stepped out of the lowest point in April, with 12.117 million and 12.057 million auto production and sales in the first half of the year. Among them, the performance of production and sales in June was even better than the same period in history. The production and sales of automobiles in the month were 2.499 million and 2.502 million respectively, an increase of 29.7% and 34.4% month-on-month, and a year-on-year increase of 28.2% and 23.8%. In particular, the continuous increase in the penetration rate of new energy vehicles will drive the rapid growth of demand for aluminum products.

Capital Securities believes that the amount of aluminum used in my country’s new energy vehicles will reach 1.08 million tons in 2022, an increase of 380,000 tons over the same period last year.

 The demand for aluminum in the photovoltaic industry is mainly divided into two parts: frame and bracket. The amount of aluminum used for photovoltaic frame is about 13,000 tons/GWh, and the amount of aluminum used for photovoltaic installed bracket is about 7,000 tons/GWh. Fang Yijing believes that under the background of steady growth, new energy infrastructure will exert its strength. It is estimated that the photovoltaic industry will use 3.24 million tons of aluminum in 2022, a year-on-year increase of 500,000 tons.

Post time: Aug-17-2022