At present, according to the concept of Baotou Aluminum, if it can build an industry with “capacity of millions of tons, full self-supplied electricity, and full range of coal-fired aluminum alloys”, then regardless of how the market is down, Bao Aluminum will always be in a favorable position.
“The Inner Mongolia power grid itself has a margin. If the price is more favorable to the enterprise, we do not need to build a self-sufficient power plant. But for the enterprise, from the perspective of its own industry development, the energy initiative is not in its own hands. In the fierce market competition, I always feel that my heart is not practical, and the feeling of ups and downs is too uncomfortable.” The head of the China Aluminum Industry Department told reporters.
However, domestic aluminum production capacity, especially electrolytic aluminum production capacity, has been seriously over-capacity. As a central enterprise, Chinalco must strictly implement policy requirements and it is difficult to add another ton of production capacity. If you want to make full use of Inner Mongolia's energy advantages to expand the efficiency of enterprises, the most likely way is that Chinalco has identified 450 million tons of production capacity by the state, and on the basis of the same amount, it has eliminated other regions through internal optimization. The production capacity of Chinalco is transferred to aluminum.
This is exactly the same as the capacity replacement policy proposed by the Ministry of Industry and Information Technology.
In July last year, the Ministry of Industry and Information Technology issued a document saying that industries with severe overcapacity, such as electrolytic aluminum, will implement capacity replacement or reduction, and ensure that new (reform and expansion) projects will not increase capacity. Among them, local governments are encouraged to explore and implement capacity index trading of government guidance, voluntary enterprise, and market operation, to play a market role, support cross-regional capacity replacement, and improve resource allocation efficiency.
However, when this contradictory policy of resolving overcapacity is really placed in front of the aluminum-colored aluminum and even the aluminum-colored faucet, there are still many thorny problems. This is not just a question of funding.
"Because the country has requirements, if the production capacity of aluminum-clad electrolytic aluminum is to increase, it is necessary to eliminate the capacity to complete the construction of new capacity, which is the details of the future." Chai Yongcheng, general manager of Baotou Aluminum Co., Ltd. told reporters.
Taking Gansu as an example, the local electricity price is 3 mils and 8 cents. The cost of electricity prices for enterprises that do not have their own electricity is higher. This makes the local subsidiaries of Chinalco a serious loss and has the possibility of capacity replacement.
However, there are too many procedures for capacity replacement: to shut down production capacity, it must be publicized. After completion, it must be confirmed by the local department and the government, and then reported to the Ministry of Industry and Information Technology. After the public announcement, it will be implemented in equal replacement or reduction.
On the other hand, electrolytic aluminum, as a large GDP, is a large industrial cluster, like the downstream of electricity and aluminum, and the output value is relatively high. The government is not willing to give up the provincial indicators.
When the aluminum market is in a bad situation, all enterprises will throw out production reduction plans. The local government often acts as a “fire brigade captain”. The most common way is to give preferential prices to enterprises. “If the electricity price is low, the industry will save lives. But half-death can't solve the fundamental problem."
If the capacity replacement can be formed into a liquid market that meets the interests of enterprises and local economic development, then it will undoubtedly be a win-win situation. However, for the electrolytic aluminum companies that are struggling, survival is still the first issue.