More than two-thirds of the electrolytic aluminum production capacity in the country is “black household”

"Most of the electrolytic aluminum production capacity has not been approved by the state, mainly because the National Development and Reform Commission later delegated the power to the local government departments." A large private aluminum electrolytic enterprise executive revealed. According to an authoritative source, “At present, only 6 million tons of the electrolytic capacity of more than 22 million tons of electrolytic aluminum in the country has been approved by the National Development and Reform Commission, and others have not been approved.” If the capacity not approved by the National Development and Reform Commission is defined as “black household” Then, more than two-thirds of the country's electrolytic aluminum production capacity is "black households." "Default" local approval? What causes the electrolytic aluminum capacity not to be controlled? The above-mentioned private electrolytic aluminum company executives said that the first is that the electrolytic aluminum industry was a high-profit industry before 2008, attracting a number of private enterprises to enter the industry, including Sichuan New Hope Group. The most important reason is the loosening of the policy. According to the senior executive, in order to support the development of the western region, the state invests in electrolytic aluminum projects in the west, many of which do not need to be reviewed by the National Development and Reform Commission and directly reviewed by local governments. However, the National Development and Reform Commission has not publicly expressed similar views. “The new project of electrolytic aluminum has always been reviewed by the National Development and Reform Commission, and this power has not been delegated to the local government,” said Lang Dazhan, deputy director of the Aluminum Department of China Nonferrous Metals Industry Association. He said that not only electrolytic aluminum, steel, building materials and many other industries have experienced capacity that has not been audited by the National Development and Reform Commission. "This is almost a common phenomenon." In this regard, the above-mentioned private electrolytic aluminum enterprise executives said that in actual operation, Enterprises investing in electrolytic aluminum projects in the western region, the National Development and Reform Commission is actually the default local Development and Reform Commission approval. For this statement, a management of China Aluminum Corporation (601600), the largest electrolytic aluminum company in China, said: “China Aluminum's electrolytic aluminum production capacity and alumina production capacity were very large in the domestic market, but later other companies. A large amount of new capacity has been built, which has gradually reduced the company's production capacity.” The decline in profits The China Nonferrous Metals Industry Association data shows that from 2002 to 2006, international aluminum prices have been on the rise, and the average annual price of LME spot is $1,350 per ton. $1431, $1716, $1898, $2569. Driven by price increases and capacity growth, from 2004 to 2007, the total profit of the aluminum smelting industry was 10.6 billion yuan, 11.9 billion yuan, 28.1 billion yuan and 36.9 billion yuan. It is the high profits that have attracted a large number of non-aluminum companies to enter. In 2005, Chinalco's domestic alumina market share was as high as 91.67%. In the following years, with the large-scale expansion of private enterprises and local state-owned enterprises, Chinalco's market share gradually dropped to 32.66% in 2009. From 2007 to 2009, Chinalco's domestic electrolytic aluminum market share was only 21%, 20% and 26.5%, respectively, and the domestic alumina market share was 34.1%, 29.4% and 32.66%. Since 2008, with the outbreak of the financial crisis, the long-term accumulation of oversupply has begun to become more prominent, and the contradiction of overcapacity of electrolytic aluminum has become more and more prominent. In 2008, aluminum prices entered a downward channel. From 2008 to 2010, the average annual price of LME spot was $2,572, $1,665 and $2,173, respectively. From 2008 to 2010, the total profit of the aluminum smelting industry dropped to 12.4 billion yuan, 5.9 billion yuan and 11.8 billion yuan by the end of 2010. The national electrolytic aluminum production capacity has reached 22 million tons, and the actual output is 15.6 million tons. 70%. From January to November 2010, the profit of aluminum smelting industry was 10.441 billion yuan, and the sales profit rate was only 3.59%, which was much lower than the average level of the industrial industry. “We have lost our advantage in the electrolytic aluminum and alumina industries. Companies that do not invest in national policies have seized the market,” said the management of Chinalco. As Chinalco lost its absolute advantage in the electrolytic aluminum industry, it has been forced to expand into other industries such as copper and rare metals in the last two years. Westward shift of production capacity According to the China Nonferrous Metals Industry Association, the newly added electrolytic aluminum project is mainly located in the western region. At present, most of the electrolytic aluminum projects under construction and proposed in the country are located in the west. In 2010, the electrolytic aluminum production capacity under construction reached 4.44 million tons, of which 68% were located in the five western provinces. Enterprises investing in electrolytic aluminum in the west mainly consider that the electricity price in the eastern region is too high, and the electricity price currently accounts for more than 40% of the cost of electrolytic aluminum. At present, about half of the national electrolytic aluminum production capacity is located in the eastern region, while the energy costs such as electricity prices in the western region are relatively low. If the production capacity is transferred to the west, the profit is still considerable. Lang Dazhan said that it is precisely considering that there are too many new production capacity. In the first half of this year, the National Development and Reform Commission and the Ministry of Supervision jointly issued the "Emergency Notice on Containing Overcapacity in the Electrolytic Aluminum Industry and Repeated Construction to Guide the Healthy Development of the Industry". All localities are required to immediately stop the proposed electrolytic aluminum project, resolutely stop any illegal approvals for new projects that expand production capacity, and cancel various preferential policies introduced by local governments.

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