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Breaking the strange circle of "reducing production and increasing production" electrolytic aluminum illegal projects face cleaning up and rectification. Insiders told the China Securities Journal that the special action plan for cleaning up and rectifying illegal projects in the electrolytic aluminum industry has been issued, and the main targets of rectification are illegal projects in production and under construction. The overall wording of the plan is strict and accountability is strengthened

insiders said that at present, the electrolytic aluminum industry has serious overcapacity, heavy pollution burden, industrial financial risks and social burden accumulation, and the supply side reform of electrolytic aluminum will be accelerated. Environmental protection, rectification of illegal production capacity and elimination of backward production capacity have become effective ways to reform the supply side of electrolytic aluminum. The vicious circle of "reduced production, increased production and new projects pouring in" is expected to change. With the implementation of the policy, the aluminum price center will be significantly improved systematically, and the electrolytic aluminum sector will usher in investment opportunities

clean up and rectify illegal projects

the above-mentioned person told the China Securities Journal that the plan strengthened investigation and used words such as resolute and rapid disposal, strict accountability and serious investigation. The newly-built illegal projects after may2013 and the projects that failed to implement the treatment opinions of Document No. 1494 are the key "care objects". This clean-up and rectification is divided into four stages, including static experiment, using standard electronic universal testing machine to carry out enterprise self-examination, local verification, special spot check and urging rectification. The plan emphasizes that the illegal capacity under construction shall be stopped immediately, and the completed capacity shall be stopped immediately

since this year, the supply side reform of electrolytic aluminum industry is expected to be more and more intense. Relevant persons from the state owned assets supervision and Administration Commission, the national development and Reform Commission and the Ministry of industry and information technology have successively said that the supply side structural reform should be carried out for the electrolytic aluminum industry. On March 23, the 2017 work plan for the prevention and control of air pollution in Beijing, Tianjin, Hebei and surrounding areas was released, and the "2+26" urban production restriction policy was announced. This is considered as the prelude to the reform of electrolytic aluminum supply side. On April 14, Xinjiang Changji Hui Autonomous Prefecture called off the 2million ton illegal projects under construction of three enterprises. The curtain of electrolytic aluminum supply side reform was opened

wanghongfei, manager of Aladdin aluminum business department, said that the excess capacity of electrolytic aluminum in 2017 may be higher than that in the previous two years. "Regardless of external factors such as policies and prices, there will be a surplus of 2.15 million tons in 2017." If the supply side reform is not carried out in time, the electrolytic aluminum industry will once again fall into a vicious circle of "reduced production, increased production and new capacity pouring in", and the industry may continue to enter a comprehensive loss

promote supply side reform in three aspects

2016, benefited from the supply side structural reform, the supply and demand of aluminum market were well oriented, the bottom of aluminum price rebounded, and the electrolytic aluminum industry turned losses into profits. However, the high profits also stimulated the electrolytic aluminum enterprises to accelerate the new production and resumption of production in the second half of 2016, their other ultimate goal. Since the beginning of this year, the new production and re production capacity of electrolytic aluminum has been growing. According to Aladdin's statistics, by the end of February 2017, the total capacity of electrolytic aluminum was 43.317 million tons, an increase of 10.6% year-on-year; The operating capacity was 37.192 million tons, a year-on-year increase of 20.2%; The operating rate reached 85.9%. According to zhuochuang information, in March this year, the completed capacity of electrolytic aluminum increased by 300000 tons, and the operating capacity increased by 357000 tons

Check whether there is abnormal sound and vibration before the experiment.

wenwenjun, vice president of China Nonferrous Metals Industry Association, said that strict control of new electrolytic aluminum production capacity is the top priority of the supply side structural reform of the aluminum industry. From the supply side, it is necessary to strictly control the new electrolytic aluminum production capacity and reduce the competitive cost; The third stage of energy reduction is 2026 (2) the consumption of energy sources and raw materials in 030 to achieve cleaner production; Strengthen technological innovation and increase effective supply; Accelerate the pace of merger and reorganization and optimize the distribution of productive forces; Regulate export order

Qi Ding believes that the supply side reform will be promoted from three aspects. First, in terms of environmental protection, it is estimated that the "2+26" urban environmental protection limited production and the "one city, one policy" of Henan Province have an impact on the output of electrolytic aluminum and alumina in the heating season of 1.06 million tons and 3million tons respectively. At the same time, the capacity of prebaked anode shrinks greatly, and "hard shortage" may force electrolytic aluminum to reduce production. Second, we will resolutely rectify the disorderly expansion of illegal production capacity. According to Aladdin's statistics, the current non-conforming capacity of electrolytic aluminum is 11.34 million tons, accounting for 26.48% of the completed capacity; The non-conforming capacity of alumina is 28.46 million tons, accounting for 37.27% of the completed capacity. Third, intensify efforts to eliminate backward production capacity. The total production capacity that has been idle for a long time, is being eliminated or is about to be eliminated is about 3.721 million tons. The electrolyzer type is mainly Ka, accounting for about 8% of the completed production capacity

under the background of falling aluminum price, high electricity cost and relatively poor bauxite resources, the electrolytic aluminum industry has undergone profound changes. The industry has greatly increased the proportion of self provided electricity, promoted the direct purchase of electricity by large users, and reduced the comprehensive electricity cost; Migration of production capacity to areas rich in energy and resources; The enterprise has evolved into an integrated form of "bauxite coal power electrolytic aluminum aluminum processing"

Qi Ding, chief analyst of non-ferrous industry of Anxin securities, told China Securities News that the rapid launch of high capacity electrolytic aluminum and its related supporting capacity has brought about pollution problems mainly caused by coal. The weak operating conditions make the debt ratio of the heavy asset electrolytic aluminum industry as high as about 80%. The reform of electrolytic aluminum supply side is imminent

the sector welcomes investment opportunities

insiders said that the introduction of the clean-up and rectification plan specifically for electrolytic aluminum this time means that the supply side reform of electrolytic aluminum will be promoted from the top-level design, and the implementation may exceed the market expectations

Anxin securities estimates that the global electrolytic aluminum output in 2017-2018 will be 63.75 million tons and 67.11 million tons respectively, and the consumption will be 63.93 million tons and 67.33 million tons respectively, basically maintaining a tight balance

Qi Ding said that considering the continuous decline of global electrolytic aluminum inventory and the imminent elimination of inventories in five places in China, aluminum prices are easy to rise but difficult to fall. With the implementation of electrolytic aluminum supply side reform policy, the aluminum price center will move up systematically. Combined with the rising prices of power coal, alumina and other raw materials, the increase of aluminum price may exceed expectations. The profit margin of electrolytic aluminum smelting is expected to expand, and the electrolytic aluminum sector welcomes investment opportunities

Citigroup analysts said that the clean-up and rectification of illegal projects in the electrolytic aluminum industry may lead to the closure of up to 5million tons of production capacity, equivalent to 11% of the existing production capacity. Meanwhile, only 2.2 million tons of the 6.4 million tons of production capacity planned to be built from 2017 to 2018 have been approved. It is expected that the global electrolytic aluminum production capacity will decline by 2% this year, and it is optimistic that the aluminum price will rise

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