sPeCIAL ArABAL - ALUMINIUM-Nachrichten – ALU-WEB.DE

ECONOMICS
as China has dozens of smelters of that similar
size. Such talk has been initiated years ago.
Henan is China’s largest province for
aluminium production, with the major five
companies being Zhongfu Industrial, Shenhuo
Group, JiaoZuo WanFang Aluminum
Manufacturing Co., Henan Wanji Aluminium
Co. and Henan Yugang Longquan Aluminum
Co. All of them have a production capacity of
0.7-0.8m tpy. Zhongfu is publicly traded on
Shanghai Stock Exchange, while both Shenhuo
and Jiaozuo are listed on Shenzhen Stock
Exchange.
In February it was announced
that China’s government aims
to “vigorously” eliminate obsolete
aluminium capacity in 2013
through economic measures such
as differential power rates. The decommissioning
of technologically
backward smelters is a key work
area in 2013.
Economic measures such as
power rates differentiation will
be studied and employed so as
to raise production input costs to
impel obsolete smelters to exit the
market. In addition, the authorities
aim to set new entry requirements
for the aluminium industry, as already
exist for secondary aluminium
producers.
China had 27.65m tonnes of
aluminium capacity at the end of
2012, with utilisation rates at only
72%. Only 45% of the total capacities
are operated with self-run
power stations, while those relying
on the state grid’s power are
deeply in the red.
Metal prices are expected to
vary little in 2013, with periodic
recovery opportunities depending
on global monetary easing and on
China’s investment policies.
China’s drive to crack down on
surplus non-ferrous metal production
capacity will extend to small
carbon cathode and anode plants as of May.
The guidelines place anode block plants
with an annual capacity of 80,000 tpy or less,
and cathode block plants with a capacity of
20,000 tpy or less, in the government’s ‘restricted’
category, meaning new investment
proposals for such small plants are likely to
be rejected. Those operating existing facilities
that fall under the guidelines may face increasing
regulatory and cost pressures.
Such small capacities proliferated on the
back of the government’s post-financial-crisis
stimulus package, spurred by local government
incentives aimed at creating employment.
But widespread overcapacity and consequent
cost pressures throughout the aluminium industry
are now driving state policies aimed at
reversing the trend. In any case, small capacity
units have already begun to cut production
amid low metal prices, particularly in high-cost
areas such as Henan province.
Cathode and anode exporters are unlikely
to be affected by the rule change, since most
plants in China’s primary export regions are
more sizeable.
Extrusion billets from Dubal
Early in April it was reported that China consumed
0.5% less energy year-on-year in 2012
per tonne of primary aluminium produced.
Electricity consumed per tonne of primary
aluminium dropped on average to 13,8 kWh
in 2012, down 69 kWh from a year ago, and
equal to a reduction in carbon dioxide emission
of 63 kg/t of aluminium produced. China
thereby saved 1.4bn kWh in 2012.
DUBAI: In March Dubai Aluminium (Dubal)
announced it has expanded its interest in
the upstream (raw materials) sector by purchasing
a 20% stake in a calciner development
project as part of a joint venture with Sinoway
Carbon Energy Holdings, Hong Kong, for
an undisclosed sum. The new venture, known
as Sinoway Carbon Co. Ltd, entails the construction
of a 560,000 tpy petroleum coke
calciner in Shandong, China.
Calcined petroleum coke (CPC), is a strategic
raw material for the aluminium smelting
industry, where it is used in the manufacture
of carbon anodes for the electrolytic process.
Dubal will be entitled to an annual off-take
volume of CPC for its smelting operations.
The Sinoway calciner is being
built in two equal phases. Construction
of the first phase was
completed in May. The second
phase is scheduled for completion
in Q4 2013. The plant will employ
Chinese shaft technology –
a well-proven, simple-to-install,
easy-to-operate system that gives
better yield than other technologies
at substantially lower capital
and operating expense. China has
a surplus supply of green petroleum
coke (GPC). Indeed, China
currently produces more than
40% of annual global GPC/CPC
production, with several GPC refineries
being in close proximity
to the Sinoway development site.
Dubal’s investment in Sinoway
represents a strategic opportunity
to mitigate the company’s supply
and quality concerns, thus contributing
to business continuity.
CPC is one of the main drivers
for cost of production, and is hence
an important factor in the business
equation. With a secure supply
of suitable quality CPC from Sinoway
calciner, Dubal will be well
placed to counter this trend, with
direct benefits to the bottom-line.
At the beginning of June, in a
move that will form a new industrial
giant in the UAE, Mubadala
Development Co. of Abu Dhabi and the Investment
Corp. of Dubai (ICD) announced the
creation of Emirates Global Aluminium. This
jointly-held, equal-ownership company will
integrate the businesses of Dubal and Emal
and has plans for significant local growth and
international expansion.
The accord builds on a successful partnership
that started with the formation of Emal
in 2006, a joint venture of Mubadala and Dubal.
Emirates Global Aluminium will have an
aggregate enterprise value of more than US-
© Dubal
24 ALUMINIUM · 9/2013