As the epidemic spreads around the world, epidemic prevention measures in various countries are escalating, and the impact of the epidemic on the aluminum industry chain is becoming increasingly obvious. Some companies that have already lacked competitiveness are accelerating their withdrawal, and new construction and resumption of production projects are also delayed or slowed down. Although the domestic COVID-19 epidemic is gradually stabilizing, due to the comprehensive impact of the global economic situation, aluminum prices have plummeted, and most companies are in a loss-making state, seriously destroying market confidence. Some companies have begun to reduce production and stop production or suspend production and maintenance in advance.

Liupanshui Shuangyuan Aluminum Co., Ltd. has suspended production of 33 240kA electrolytic cells in the early stage, and plans to reduce production by 50 units in the near future, involving a production capacity of about 30,000 tons. According to the manufacturer, the electricity price in the region has always been higher than the industry average, and the operating cost pressure of enterprises is prominent. In addition, the current aluminum price continues to fall, so we can only choose to repair the tank in advance and some production suspensions.

The Jiayuguan Branch of Gansu Dongxing Aluminum Industry recently began centralized maintenance and planned to overhaul 70 500kA electrolytic tanks, involving a production capacity of about 90,000 tons; the Longxi Branch repaired 20 240kA electrolytic tanks, involving a production capacity of about 12,000 tons.

China Aluminum Shanxi New Materials Co., Ltd. has determined to reduce production. The total production capacity of the electrolytic aluminum part of the company is 430,000 tons. It was previously started to build 350,000 tons, and decided to reduce production by another 70,000 tons. After the production reduction, the production capacity will be about 280,000 tons, and it is expected to complete production reduction in early April.

Chongqing Guofeng Industrial Co., Ltd. has suspended production for maintenance and may resume production from June 1. The company has a total of 4 transformers, 124 240kA electrolytic cells, and its original operating capacity is 72,000 tons.

At present, domestic electrolytic aluminum companies have been involved in production reduction and suspension of more than 200,000 tons. Although foreign electrolytic aluminum companies have not yet caused large-scale production reduction and suspension of production, the downstream aluminum industry has suffered heavy losses. Recently, news of the closure of European car companies and aluminum processing companies has been frequently reported in the market.

Raffmetal, the largest recycled aluminum manufacturer in Europe, has suspended production for one week due to the impact of the epidemic. It is reported that the company produces about 250,000 tons of recycled aluminum alloy ingots every year, most of which are 226 aluminum alloy ingots (common European grades, which can be used for the delivery of LME aluminum alloy ingot warehouse receipts).

Hydro is reducing or stopping production in some automotive and construction sectors to cope with changes in demand due to the coronavirus outbreak, and the reductions in Southern Europe are more intense in this widespread production cut.

Constellium has decided to reduce or suspend production at certain production sites in view of the impact of the epidemic on employees, customers and the market. Headquartered in Paris, the company is a leading global manufacturer of high value-added aluminum products, focusing on the aerospace, automotive and packaging markets.

There are more than 100 automobile factories that have been closed or intend to be shut down overseas, including Daimler, Volkswagen, Fiat Chrysler Group (FCA), Peugeot Citroen Group (PSA), etc.
The large-scale shutdown of auto companies has had a huge impact on aluminum processing companies. The automobile industry is also one of the important areas of aluminum consumption. Europe, a hard-hit area of the epidemic, is a major area of global automobile manufacturing. It is not difficult to imagine what impact the European automobile market will have on global aluminum demand. The shrinking overseas terminal demand will inevitably have a significant impact on my country's aluminum product exports. Customs data shows that China's cumulative exports of unwrought aluminum and aluminum from January to February were 669,000 tons, a decrease of 25.2% from the same period last year. It is expected that the impact of weakening overseas demand will be more obvious in the export data in the second quarter.

In short, under the influence of the full outbreak of overseas epidemics, the plummeting oil prices, and the four circuit breakers of US stocks, the global economy is in a downturn. If the global epidemic is not effectively controlled, uncertain risks such as border lockdowns in various countries, logistics blockages, and economic recession continue to increase. Aluminum materials will decline due to obstacles in exports. Coupled with the pressure of increasing inventory, the boost to electrolytic aluminum demand in the later period will still need to be delayed for several months before it will take effect. During this period, weak fluctuations and declines in aluminum prices will continue to exist.


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[Title] Aluminum prices plummeted! Aluminum demand has dropped significantly! Aluminum companies have reduced production suspension! When will the price of aluminum fall stop?
Link: https://news.ccmn.cn/news/ZX003/202003/efecc82f70264c7eaa6a8d107b1808de.html
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