Factor Analysis

　　I. Favorable Factors

　　(1) Supply-side reform will continue to be deepened.

　　2018 Year 1 Moon 17 On [date], the Ministry of Industry and Information Technology issued the “Notice on Matters Concerning Capacity Replacement by Aluminum Electrolysis Enterprises through Mergers, Reorganizations, and Other Means,” clearly specifying for the first time the implementation period for aluminum electrolysis capacity replacement and requiring: 2011-2017 The electrolytic aluminum production capacity indicators that have been shut down and included in the elimination announcement for the year must be... 2018 Year 12 Moon 31 Capacity replacement was recently completed; failure to meet the deadline will result in the inability to use such capacity for replacement purposes. Supply-side reform in the electrolytic aluminum industry will continue to deepen, and non-compliant production capacity is expected to be shut down at an accelerated pace. Inventory levels are also likely to peak and then begin to decline, signaling a turning point in the fundamentals of the electrolytic aluminum sector. The ongoing push to reduce overcapacity will effectively alleviate the situation of excess electrolytic aluminum production capacity and significantly improve the profitability of the industry.

　　(2) Industrial upgrading enhances competitiveness.

　　In addition to reducing overcapacity, the government is also focusing on promoting quality improvements in the electrolytic aluminum industry. 2017 Year 9 The "Guiding Opinions on Launching Quality Improvement Initiatives," issued by the State Council, emphasizes the need to enhance the supply level of raw materials and accelerate the transformation and upgrading of traditional industries such as steel, cement, electrolytic aluminum, flat glass, and coke. A successful industrial upgrade will bolster the competitiveness of the electrolytic aluminum industry, enabling it to achieve faster growth when infrastructure investment picks up, the electronics industry accelerates rapidly, and demand begins to recover.

　　(3) “ The Belt and Road ” Conducive to boosting aluminum consumption and exports.

　　 “ The Belt and Road ” The economies of countries along the route are mostly at a stage of development, and their per capita metal consumption is significantly lower than the global average, leaving enormous potential for future infrastructure development. “ The Belt and Road ” Infrastructure projects along the route—including railway transportation, oil pipelines, industrial plants, and power investments—will effectively boost demand for at least copper, aluminum, lead, and zinc in China. 6 The growth in consumption and exports of non-ferrous metal varieties.

　　II. Adverse Factors

　　(1) Severe product homogenization

　　Due to insufficient technological capabilities in domestic aluminum production and the reluctance of many manufacturers to invest heavily in production equipment, the electrolytic cells they use fail to meet world-class standards. As a result, the quality of the aluminum products they produce is not particularly high. The average quality of domestically produced aluminum makes it highly substitutable; under conditions of relatively short product lifecycles, companies’ market shares tend to become unstable. Consequently, many domestic enterprises that rely on aluminum have no choice but to turn to overseas suppliers in order to obtain aluminum products that meet their specific requirements. On one hand, there is overcapacity; on the other hand, product competitiveness is lacking. The homogenization of products has left manufacturers in an extremely precarious situation, surrounded by challenges on all sides.

　　(2) Severe environmental pollution

　　In the electrolytic aluminum industry, carbon is used as a conductive material in the production process to manufacture prebaked anodes—essential components for aluminum electrolysis. The primary raw material for these prebaked anodes is petroleum coke. During aluminum electrolysis, sulfur dioxide gas containing harmful pollutants is generated. If companies fail to effectively recover and recycle these waste gases, they will release large amounts of sulfur dioxide into the atmosphere, causing severe air pollution. Moreover, the waste generated during aluminum production also poses a significant threat to environmental pollution. Many companies are reluctant to invest heavily in wastewater treatment systems; some even directly discharge industrial residues into nearby rivers, thereby contaminating local water resources. At present, China’s environmental pollution situation has become extremely serious. Even though wastewater treatment costs are high, the electrolytic aluminum industry must raise its pollution-control standards if it hopes to achieve sustainable development.

　　Electrolytic Aluminum Production Capacity Forecast

　　2016 China's electrolytic aluminum production capacity for the year is 4，244 Ten thousand tons, up year-on-year 10.56% ; As of 2017 Year 10 Monthly production capacity is 4，578 Ten thousand tons.

　　Taking the above factors into account, we anticipate that, 2018 China's electrolytic aluminum production capacity will reach... 4，709 Ten thousand tons, over the next five years ( 2018-2022 ) The average annual compound growth rate is approximately 2.58% ，2022 will reach the year 5，214 Ten thousand tons.

　　Electrolytic Aluminum Production Forecast

　　2016 China's electrolytic aluminum production for the year was 3，187 Ten thousand tons, up year-on-year 1.3% ；2017 Year 1-11 Monthly production is 2，954 Ten thousand tons, up year-on-year 1.7% 。

　　Taking the above factors into account, we anticipate that, 2018 This year, China's electrolytic aluminum production will reach... 2，984 Ten thousand tons, over the next five years ( 2018-2022 ) The average annual compound growth rate is approximately 1.83% ，2022 will reach the year 3，209 Ten thousand tons.

　　Aluminum Electrolysis Consumption Forecast

　　2016 China's electrolytic aluminum consumption for the year was 3，192 Ten thousand tons, up year-on-year 2.31% ；2017 Year 1-6 Month, consumption volume is 1，628 Ten thousand tons.

　　Taking the above factors into account, we anticipate that, 2018 China's electrolytic aluminum consumption will reach... 3，341 Ten thousand tons, over the next five years ( 2018-2022 ) The average annual compound growth rate is approximately 2.82% ，2022 will reach the year 3，735 Ten thousand tons.