Policies Frequently Emerging Aluminum Industry

 Recently, policies and incidents affecting the electrolytic aluminium industry have occurred frequently. Among them, in terms of environmental protection and production restriction, several policies and rules have been promulgated, such as the Action Plan for Comprehensive Air Pollution Control in Autumn and Winter of 2018-2019 in Beijing, Tianjin and Hebei and the Three-Year Action Plan for Winning the Blue Sky Defense War; in terms of alumina, five places in Liaoning Province have announced the shutdown of alumina projects since August, involving 18.5 million tons of total capacity; in terms of self-owned power plants, Jilin University has announced the shutdown of alumina Cross subsidy of 0.15 yuan per kilowatt-hour for self-owned coal-fired power plants is levied; environmental protection and production restriction are also included.

According to our calculation, this time (2+26 cities, including Xiongan New District of Hebei Province, Xinji City, Dingzhou City, Jiyuan City of Henan Province) affected electrolytic aluminium production capacity totals about 9.6 million tons. If strictly implemented, the production of electrolytic aluminium will be reduced by 960,000 tons during the heating season; affected alumina production capacity totals nearly 30 million tons, if strictly implemented, during the heating season will be reduced by nearly. 3 million tons of alumina output (corresponding to the production of 1.5 million tons of electrolytic aluminium), alumina production limit is slightly greater than that of electrolytic aluminium; self-contained electricity collection. The collection of 0.15 yuan/degree cross subsidy in Jilin Province is likely to promote the other provinces to collect appropriate fees for their own power plants in response to the "three batches of price reduction measures issued by the National Development and Reform Commission".

The collection of the cost of self-owned power plants will increase the cost curve of electrolytic aluminium industry, raise the price of aluminium, promote fair competition in the industry; alumina, carbon aspects. Influenced by the shutdown of some bauxite mines in Shanxi and Henan due to environmental protection, the price of bauxite has risen to 500 yuan/ton, and the price of alumina has risen to 3000 yuan/ton. At the same time, the price of carbon has fallen to the level of balance of profits and losses in the industry, and the price of carbon in some areas has begun to rebound; the production limit will continue to be implemented in the heating season of 2018-2019, and the related fees for self-owned power plants. With the four catalysts of the strengthening of levy expectation, the rising of alumina/pre-baked anode price and the continuing decline of consumption inventory in off-season, the fluctuation of aluminium price is a big probability event, and the specific rhythm and intensity will depend on the location of the policy.