AZ China Conference Sponsor: Qingxin Carbon

Written by CT

We’re excited to have a brand new Chinese sponsor this year, Qingxin Carbon.

QX logo

CPI Ningxia Energy Aluminum Qingxin Carbon Co.,Ltd. (QXC) is a member of the China Carbon Association and the drafter of cathode carbon technical standards for the National Administration of Light Industry Standards Committee. QXC is one of China’s largest cathode block manufacturers, specializing in producing and researching cathode blocks used in aluminum smelters. The company was established in October 1999. The Company owns two separate production lines of graphitic products and graphitized products, and each production line has 20,000 tons of production capacity. According to different customers’ preferences for the shape, they produce cathodes either by vibration machine imported from Outotec or use a domestic extrusion machine from a Shanghai heavy machinery plant. With the use of modern production equipment and advanced production technology, the company has reached production capacity of 40,000 tons of cathode products used for aluminum smelter.

QXC joined into China Power Investment Corporation (CPIC) which is one of the five biggest Power suppliers of China in 2009, now QXC is one of 3 subsidiary companies of the CPIC group. QXC has passed the GB/T24001-2004/ISO14001:2004 Environmental Management System, the GB/T28001-2001 OHSAS, and the GB/T19001-2008/ISO9001:2008 Quality Management System and has acquired the related certificates in 2006. QXC was named one of the nations’s new technology enterprises in 2009.

At present they supply following products to aluminum plants: graphitized cathode block, graphitic cathode block, different grade graphite added blocks, sidewall/corner blocks, ramming paste and carbon glue such lining material and so on. The green blocks size scope is from 425×425×3700~4200 mm to 750×590×3700~4200mm.

1hole two holes group

GXC exports to a number of countries all around the world.

export sales

AZ China Conference Sponsor: Koppers

Written by CT

Koppers was a sponsor for our 2008 conference in Sanya. We’re glad to have them back again this year!

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Koppers is a leading integrated producer of carbon compounds and treated wood products for the aluminum, steel, chemical, rubber, railroad, and utility industries. Headquartered in Pittsburgh, Pennsylvania, Koppers has multiple manufacturing facilities in the United States, Canada, United Kingdom, Denmark, The Netherlands, Australia, and China.

Carbon Materials and Chemicals

Koppers carbon materials and chemicals are essential to the production of aluminum, steel, plastics, resins, treated wood, and rubber products. In addition, the carbon materials and chemicals also increase the durability of many products including railroad ties, utility and transmission poles, and marine pilings.

As a leading distiller of coal tar, a by-product of the transformation of coal into coke, Koppers produces carbon pitch, refined tar, creosote, carbon black feedstock and chemical oils. The chemical oils resulting from distillation are used to produce naphthalene and phthalic anhydride (PAA).

Learn More

How are Koppers Products Used?

It all starts with coal.

Coal is carbonized to make coke and Koppers purchases a by-product of Coke-Coal tar. Koppers distills the coal tar and manufactures carbon materials and chemicals that are essential to the aluminum, steel, paint, plastic, wood-preserving, and carbon black industries.

The products from the coal tar distillation also increase the durability of products such asrailroad ties and utility poles.

The chart below illustrates how Koppers manufactures materials from coal tar as well as the industries that rely on Koppers products to manufacture other goods and services that are needed worldwide.

AZ Conference Sponsor: Bathco

Written by CT

 

 

 

 

 

 

Make sure to say hi to the Bathco team at the May 5-7 conference!

Bathco logo

Bath Material is the electrolyte used in the Hall-Héroult process to produce primary aluminium. It’s also known as Secondary Cryolite, Crushed Bath, Bath Cryolite, Pure Bath, Bath and tapped Bath Material.

During the aluminium smelting process, surplus Bath Material can be generated because of high Sodium (Na) content in the alumina. This surplus is tapped in a liquid form and then crushed to be reused to start up new pots or to compensate for electrolyte losses.

Bath Material can also be used in aluminium scrap recycling as well as in a number of other processes such as in the manufacture of glass, steel, enamel, ceramics and more.

The global supplier of Bath Material

Bathco is the only company in the world dedicated exclusively to the Bath Material market.  Bathco collaborates with a large community of smelters that sell their surplus Bath and can also provide various other quality levels of Bath including Bath with higher Alumina content.

Contact them with your specifications at info@bathco.ch

AZ Conference Sponsor: Aminco Anodes

Written by CT

With the conference fast approaching, we’d like you to get acquainted with some of the good people who make it all possible: our sponsors.

Today we’ll introduce you to Aminco Anodes, the leading producer of precision-engineered, cost effective and energy efficient carbon anodes.

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Smelters of all sizes partner with Aminco to supply their carbon anodes. Aminco Anodes have Swiss engineering and Chinese manufacturing ensuring they are high-quality anodes providing the best cost-benefit characteristics in the industry.  Aminco Anodes focuses on meeting the intellectual capital and technical support needs of their exclusive suppliers and customers and from our personal experience, they provide excellent customer and customized services.

You will need a special code for certain aspect of the conference so if you are attending remember the password “amincoanodes”.

How do I get in touch with Aminco? You can contact them directly here and read more about them here.

China: 90% smelters were at a loss in Q1 2014

Written by June Wang

As the curve below shows, the highest cash cost of domestic smelters was RMB16,900/t and lowest was RMB10900/t.  As of 28 March 2014, the SHFE spot price was RMB12845/t. With the aluminium price sliding through the quarter, nearly all the smelters were under extreme pressure.

CCC Q1

Only 7 smelters finished the quarter under the SHFE spot price line.

From the beginning of 2014, aluminium prices continued down due to worries about the oversupply and the economic conditions in China. In addition, the government emphasis on policy implementation, such as tightening credit, tiered power pricing added more pressure, and in come cases sliced their already thin margins.

As of 17 April 2014, the cuts to production have reached 1,375 kt, with 490kt  in April, although prices have now stopped falling and seem to be recovering slightly.

We will likely see more production cuts, despite the improving price, as the depth of losses is still too great for many.

For more information about China’s Cash Cost Curve, please contact me at AZ China.

MIIT names aluminium companies meeting “Aluminium Industry Norms”

Written by Yuan JI

China’s Ministry of Industry and Information Technology (MIIT) issued its “Aluminium Industry Norms” standard in July 2013, which modified and replaced “Aluminium Industry Entrance Conditions (2007)”. The document focuses on layout and scale, product quality, technology and facilities, energy consumption, resource utilization, environment protection, production safety and social responsibility. In modified norm, MIIT provides clear and specific indicators for measuring.

After several months, MIIT has announced the first batch of companies that meet the new norms. In all, 36 companies (40 projects) are listed. Of those, 26 are aluminium smelters with 9.55mt in total capacity, accounting for 30% of national capacities. On the list, 79% of capacities are state-owned, such as Jiaozuo Wanfang, Gansu Hualu, Huanghe Xinye, while 21% belong to private groups, for instance Qinghai Qiaotou and Shandong Yili. Some 70% of qualified capacities are located in Henan, Inner Mongolia, Qinghai and Yunnan provinces. As for technology, state-owned companies apply technology in the range of 160ka up to 500ka, while those private companies on the list employ technology ranging from 230ka to 400ka.

The 2nd batch will be announced later this year.

Companies that meet this standard are somewhat protected from some of the edicts regarding over-capacity, mainly because the attack on over-capacity has focused on inefficient, outmoded plants and technology.   On the same token, to date none of the plants that have shut down this year have shut because the government told them to.   All have cited the harsh economic conditions and low metal prices.

May 5-7, 2014

Written by CT

There are less than three weeks to go before the 4th International Aluminium and Carbon Conference, starting Monday, May 5.  Major topics to be discussed at the conference:

1. How can we decipher China’s past to understand its future?

2. What will China’s aluminium industry look like in 2020?

3. What is the impact of shale oil on the aluminium industry?

4. What current coke problems are we facing and what are the solutions?

5. What are the future trends for the bottom and inside of the pot?

From the PPTs we’ve seen so far, our VIP speakers have some useful information to share and it will be a great time for networking. If you haven’t already, don’t forget to register on our conference website. You’ll also want to reserve your Sofitel hotel room soon as available rooms are dwindling.

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Proof that markets are not perfect

Written by Paul Adkins

The Chinese government today announced that Q1 GDP came in at 7.4% on a year on year basis.   Immediately, markets jumped, and the Australian dollar, which is highly dependent on the Chinese economy, rose almost half a cent.

Yet, the real story is not the 7.4% number, but the quarter on quarter one.   Taking the GDP growth for Q1 compared sequentially and extrapolated to a full year, GDP came in at 5.7%.

In other words, if China keeps growing at the rate of Q1, it will end up nowhere near its stated target of 7.5%.

So why did the markets respond positively to something that was decidedly negative?   It’s because mainstream economists and commentators had predicted that the YoY number would be 7.3%.   The tiny over-achievement compared to predictions by foreign commentators was seen as good news.   Yet the real news in the GDP numbers was missed.

What’s more likely to happen is that the QoQ number will cause Beijing to increase its rhetoric about more railways, housing developments and other infrastructure.   While we will not see a fully-fledged stimulus package, we may see slightly more spending announced, to keep the economy ticking over until trade and domestic consumption improve enough.

By the way, those of you who subscribe to our monthly Black China report will know that the lower GDP should not have been a surprise.   As we said in that report just a few days ago, all the signs pointed to a slow-down.

And the slow-down is there, despite the mainstream press and some markets misunderstanding the numbers.

 

China’s 7 trillion RMB stimulus plan

Written by Richard Lu

Along with the possibly weaker Q1 GDP growth figure, China’s news media has been focusing on the government’s “Steady Growth” strategy recently. Several provincial governments have released local stimulus plans, and when added together, these individual programs amount to 7 trillion RMB.

You might wonder whether those stimulus plans will be fruitful or not, whether they are the same as last 4 trillion stimulus package or not, and whether these programs will lead to the same problems that originated in 2008′s package. The key points in the government’s plan go some way to answering those concerns.

1. China won’t tolerate a hard landing, and doesn’t expect one, so stimulus plan must be applied to keep the economy growth.
2. Investment will remain the major momentum in driving China economy growth.
3. 7 trillion investment refers to key project investment in 5 province including Guangdong, Hainan, Tianjin, Jiangxi, and Guizhou.
4. Different from the last 4 trillion stimulus package, this 7 trillion won’t be invested instantly but gradually injected over several years.  The growth rate for those key project investments in 2014 is only about 11%.
5. The investment will be centered on railway network expansion, shantytown redevelopment and tax cuts for small companies.
6. With the heavy local debt, more private funds will be introduced into the investment.

It’s anyone’s guess to what extent these programs will be successful or not, but if they can be implemented as pronounced without any delays, it would be good news for commodities including aluminium.

According to a Forbes article, China’s railway network will reach 120,000Km in 2015, but is still a long way behind countries such as the USA.  With a great increase in railway network length, and more pervasive aluminium alloy applications in high speed train and rail cars, aluminium will be very likely well consumed by this sector. Shantytown redevelopment will build another root on commodity consumption, so coupled with other similar infrastructure projects, current over-capacity of aluminium will also be somewhat relieved. Perhaps the impact would not be big enough to ease the glut completely, but we could still expect some support on aluminium price from this positive news.

We will monitor the progress of these programs, and their impacts on primary aluminium.

Xinfa, the unique

Written by Richard Lu

Both SHFE and LME aluminium prices have hit historical lows recently. As a result of the continued subdued prices, many smelters inside and outside China are forced to consider, plan or implement curtailments. However, Xinfa, the third largest aluminium company in China, has announced a 550KT new expansion at its Xinjiang smelter. Its odd action definitely distinguishes Xinfa from the others and makes it unique in the aluminium industry.

Xinfa is betting the market will pick up eventually, once enough loss-making smelters retreat from the market, putting it in a position to reap the benefits.

But how can Xinfa afford to do this, especially in today’s environment? Probably an anecdotal story can give some hints. Looking back to 2004, Xinfa took the risk of building up its first production lines, which required 1.5 billion RMB initial investment. Financing that amount of money through loans didn’t make any sense at that time, because the government was very conservative on aluminium projects and no bank could support the project on its own. Mr. Zhang Xuexin, the CEO, boldly decided to finance the capital internally through Xinfa’s employees with a daring proposition, namely 50% return rate per half year.

The internal financing motivated the employees, and coupled with the right judgment on the market, Mr. Zhang soon delivered his promise successfully.   Today, Xinfa is recognised throughout the Chinese aluminium industry as the most successful, and soon to be one of the largest.

According to our estimates, Xinfa’s total capacity will reach more than 3 million tons per annum after the expansion and will rank them as No.2 in China’s primary aluminium industry, just behind Chalco. However, compared to under-performing Chalco, we could see Xinfa can become the leader and icon of China aluminium industry in future.

Other assets controlled directly and indirectly by Xinfa, both upstream and downstream, are also performing well. So let us keep an eye on its development and verify if it could become the industry leader. For me, I stand at the bullish side.