In-depth analysis of the recycled aluminum industry chain

The upstream sources of aluminum products are divided into electrolytic aluminum and recycled aluminum. In the past, electrolytic aluminum was the main source of supply for my country's aluminum alloy products. More than 80% of electrolytic aluminum used thermal power, and the industry's total carbon emissions accounted for about 5% of the carbon emissions of the entire society.

Due to high energy consumption and high carbon emissions, policies strictly control the increase in electrolytic aluminum production capacity, and the overall increase in the industry is limited.

With the continuous deepening of supply-side reform and the continuous efforts to achieve dual-carbon goals, the total domestic electrolytic aluminum production capacity ceiling is basically determined to be approximately 45 million tons.

According to statistics from My Nonferrous Network, China’s electrolytic aluminum production capacity was 43.08 million tons in July 2021, which is approaching the red line of the compliance capacity ceiling.

As another source of aluminum products, recycled aluminum has obvious energy saving and emission reduction effects, and its importance has been greatly increased. It is more in line with the scientific concept of green environmental protection and sustainable development. Under the dual-carbon background, recycled aluminum is expected to become a substitute Industry mainstream.

According to the forecast of the Recycled Metal Branch of the China Nonferrous Metals Industry Association, compared with the production of the same amount of electrolytic aluminum, the output of 7.4 million tons of recycled aluminum in 2020 is equivalent to: energy saving of 2547 tons of standard coal and water saving of 1.6 billion cubic meters, reducing solid waste emissions by 128 million tons and reducing carbon emissions by 81.18 million tons.

According to Antaike statistics, the carbon emission of a single ton of recycled aluminum is 0.23 tons, which is about 2% of the electrolytic aluminum production process.

The output of recycled aluminum in China and the world has maintained steady growth. In 2020, global secondary aluminum production was 34.71 million tons, a year-on-year increase of 5.18%.

The "14th Five-Year Plan" Circular Economy Development Plan proposes that the output of recycled aluminum will reach 11.5 million tons by 2025. Based on my country's recycled aluminum output of 7.4 million tons in 2020, the annual compound growth rate will reach 9.2%, the recycled aluminum industry has ushered in a period of rapid development.

Aluminum metal has strong corrosion resistance. Except for some aluminum chemical containers and devices, aluminum is almost not corroded and loses very little during use. Therefore, it can be recycled many times and has many advantages. Strong recyclability, recycled aluminum is produced by utilizing this characteristic.

Recycled aluminum refers to aluminum-containing scrap produced in industrial production and social consumption that can be recycled and reused to produce recycled aluminum alloys. It is obtained after pretreatment, smelting, refining, ingot casting and other production processes. Aluminum alloy. It has the characteristics of low production cost, low pollution and low energy consumption.

Recycled aluminum alloys have obvious competitive advantages in production costs compared to aluminum alloys produced using electrolytic aluminum.

Recycled aluminum industry chain_

The upstream of the recycled aluminum industry chain is mainly scrap aluminum, while the downstream is mainly the production of various aluminum alloy castings, and its main application areas are automobile and other industries.

Illustration of the recycled aluminum industry chain:

Upstream of the recycled aluminum industry chain: scrap aluminum materials

In terms of raw materials and processes, the production process of recycled aluminum It is shorter than raw aluminum and requires simpler raw materials.

The raw material for the production of primary aluminum is bauxite resources. After the mineral is mined, it is refined through a chemical process to produce alumina, and then electrolytic aluminum is obtained through electrolysis. Electrolytic aluminum can be used to cast pure aluminum profiles, or other metallic and non-metallic elements can be added to make aluminum alloys.

In terms of production energy consumption and carbon emissions, since the main raw material for the production of recycled aluminum is scrap aluminum, there is no need to go through the high energy consumption and high carbon emissions process from bauxite to alumina to electrolytic aluminum. process.

From the raw material side of recycled aluminum, the purchase cost of scrap aluminum is the main cost of recycled aluminum alloy ingots.

The purchase cost of scrap aluminum directly affects the profitability of recycled aluminum companies. Companies that can purchase raw materials at low costs will have a more competitive advantage in the competition.

In addition to being used by recycled aluminum companies to produce aluminum alloys, scrap aluminum basically has no other uses for large-scale production. In 2020, 80% of scrap aluminum was used to produce cast aluminum alloys.

Midstream of the recycled aluminum industry chain: production link

The production process of recycled aluminum mainly includes sorting, pretreatment, smelting, ingot casting and other processes, which is relatively simpler than electrolytic aluminum production.

The recycled aluminum industry is a capital-intensive enterprise with high entry barriers. Only by achieving large-scale, intensive, and modernized production can production costs be reduced and profit margins expanded.

Main participating companies in the recycled aluminum industry:

Data source: Xingxingcha

The competitive landscape of the recycled aluminum industry is relatively fragmented, and the market share of the leader has room for further improvement. .

In 2019, the CR6 of the industry was 28.68%. Lizhong Group, which has the highest market share, has a market share of 6.29%. The top six also include Huajin Group, Shuaiyichi Group, Shunbo Alloy, Yiqiu Resources and Xinge Group.

The "Aluminum Industry Standard Conditions" issued by the Ministry of Industry and Information Technology stipulates that the scale of new recycled aluminum projects should be more than 100,000 tons per year, and the production scale of existing recycled aluminum enterprises should not be less than 50,000 tons per year. Policy restrictions It will promote the accelerated liquidation of small and medium-sized enterprises, and there is still room for improvement in the market share of industry leaders.

Market share of enterprises in the recycled aluminum industry:

_Downstream: Automobile lightweighting accelerates industry development

Energy saving, emission reduction and new energy vehicles have entered a rapidly developing market Against this background, the aluminum industry is accelerating towards green, low-carbon and high-quality development.

Green and clean recycled cast aluminum alloys have attracted much attention. Aluminum alloys have become the preferred material in fields such as automobile lightweighting, rail transit and new energy vehicles, and demand will continue to grow.

The aluminum deep processing and auto parts industry has formed a complete system of "smelting equipment R&D and manufacturing → casting aluminum alloy R&D and manufacturing → functional master alloy R&D and manufacturing → wheel mold R&D and manufacturing → wheel product design, production process technology research and manufacturing" industrial chain.

New intermediate alloy materials are one of the key raw materials for cast aluminum alloys, and cast aluminum alloys are the main raw materials for lightweight wheels.

Data source: Xingxingcha

Although in general the recycled aluminum industry still has problems such as small enterprise scale, low industrial aggregation, and imperfect industrial chains, in Driven by market competition and industrial environmental protection policies, the competitive landscape of the recycled aluminum industry is developing in the direction of reducing the number of small-scale enterprises and gradually expanding the production capacity of large-scale enterprises.

According to the "Roadmap for Energy Saving and New Energy Vehicles" released by the China Society of Automotive Engineers, the amount of aluminum used in single vehicles is expected to reach 250 kilograms in 2025.

According to the "China 2035 New Energy Vehicle Development Plan", the penetration rate of China's new energy vehicles will reach 20% in 2025, so the application of recycled aluminum in the field of new energy vehicles has great growth potential in the future. At the same time, the demand for aluminum in the power communications field, real estate, photovoltaic industry and other fields is also recovering strongly.