The content of aluminum in the earth's crust is the third (about 8.8%), second only to oxygen and silicon, and is the most abundant metal element in the earth's crust. Among the metal varieties, second only to steel, it is the second largest category of metal. Aluminum is widely used because of its low density, thermal conductivity, electrical conductivity, and corrosion resistance.
Figure 1: A wide range of applications for aluminum
China is the world's largest consumer of aluminum, and consumes more than 14 million tons of aluminum per year, accounting for about 39.4% of global consumption. However, compared with developed countries, China's per capita use of aluminum is still at a low level. We judge that with the continuous improvement of urbanization rate and the continuous deepening of consumption and industrial upgrading, in the long run, China's aluminum consumption endogenous growth space remains. Very broad.
In the past two years, copper prices have continued to rise, aluminum prices have risen less, and copper-aluminum ratios have continued to rise, hitting record highs. The copper-aluminum ratio is currently 3.84, the average value of the past decade is 2.15, and the ratio of copper to aluminum is hitting new highs, making the economics of aluminum-based copper further prominent.
Figure 3: Copper and aluminum are higher than innovations
In addition to the price advantage of the metal itself, the aluminum-based copper also has significant cost savings due to certain performance improvements. Today, as oil prices remain high, the demand for lightweight vehicles is becoming more and more urgent, and the increase in the rate of automotive aluminization is logical.
From the perspective of resource endowment, aluminum should also be promoted and applied in more fields. The global aluminum resources are about 27 billion tons, and the static storage-production ratio is about 732 years. The global storage-production ratio of copper is only 34 years. Compared with other metals, there is no resource bottleneck in the application of aluminum.
Figure 4: Global aluminum resources are abundant
Looking back at history from a macro perspective, the correlation between economic growth and the growth rate of copper consumption has been weakening in recent years. The replacement of copper by other materials has made its consumption sensitivity to economic growth decline or an important factor. From the point of view of the physical and chemical properties of copper and aluminum, aluminum is also the best material to replace copper. In 2009, in the material of copper replacement, aluminum accounted for about 50%.
Logical reasoning combined with quantitative verification can make the conclusion more credible. According to Barcaly's research data, the increase in copper-aluminum ratio does reduce the growth rate of copper consumption, but at different times, this impact is different. From 1990 to 2000, for every 0.1% increase in copper-aluminum ratio, the growth rate of copper consumption fell by 5.44%. By 2011, this figure is expected to fall back to 0.57%.
Table 1: Analysis of the effect of copper-aluminum ratio change on copper substitution
In general, aluminum will have a broad application prospect in the future, from the perspective of resource adequacy and economy. However, in different stages of economic development, the application forms of aluminum are different. In the early stage of industrialization, aluminum was more consumed in the form of primary products and general processed materials. When entering the industrialization mature period, the consumption form of aluminum will be more reflected in high-end products and deep processing materials. In the period of economic structural transformation, with the development of strategic new industries, the performance of aluminum will be fully explored and developed, and its application form will move toward higher value-added fields. From the perspective of the consumption structure of aluminum in different countries, developed countries are more reflected in transportation, packaging, etc.; while China is still in infrastructure construction, it is also a general trend to tilt to industrial profiles and packaging foils in the future.
Figure 6: Differences in metal demand patterns at different stages
From an industry perspective, after more than 120 years of development, aluminum smelting technology is basically mature, and simple electrolytic aluminum production has been unable to obtain more excess profits. At present, the situation of overcapacity has not changed. The aluminum processing enterprises adopt the model of aluminum price + processing fee, and the downstream demand continues to boom. High-end aluminum processing enterprises with technological advantages, scale advantages and cost advantages are expected to earn relatively stable processing rates in the process of capacity expansion. To continuously improve performance.
Figure 8: China's electrolytic aluminum overcapacity
In the long run, aluminum as a young metal, its application areas must continue to expand and extend. Compared with developed countries, China's per capita use of aluminum is still low. With the further improvement of China's urbanization rate and the continuous deepening of consumption and industrial upgrading in the economic restructuring, China's aluminum consumption endogenous growth space is still very broad.
High oil prices and high innovation ratios of copper and aluminum provide a good external environment for the replacement, popularization and promotion of aluminum, and are also expected to become catalysts for the improvement of aluminum performance. The abundant aluminum resources make the industrial scale of aluminum use no resources. bottleneck.
No matter from the macro level of economic growth, the mid-view perspective of industry evolution, and the micro-behavior of enterprise development, it is found that the current aluminum industry will become an inevitable trend from the smelting of primary electrolytic aluminum into deep processing.
Aluminum processing products are generally priced in the form of “aluminum price + processing fee”. When the total downstream demand and structural increments increase rapidly, the company has technical advantages, channel advantages, cost advantages and location advantages. It can be guaranteed, and there is still the possibility of improvement. If the capacity expansion factor is superimposed, the growth of performance will be rapid and significant.