By the U.S. sub prime mortgage crisis and economic slowdown, the impact of the European Union, the international market drastically reduced the demand for aluminum products such as superposition of a variety of factors, China’s export of aluminum industry is facing unprecedented challenges.
11, Foshan Municipal Bureau of Foreign Trade officials briefed reporters on the South China Sea an aluminum enterprises currently deep difficulties. He said a drop in demand in the international market is very formidable, at present the South China Sea some of the operating rate of a serious shortage of aluminum companies, some small and medium enterprises have entered the cut off adjustment of status.
The South China Sea known as the hometown of China’s aluminum that in this area is only 1073.82 square kilometers of land, emerged more than 200 aluminum producers, the country produced 60% of the aluminum, and have emerged as Hing Fat aluminum, Caine America, Asia, phoenix aluminum and many other well known brand in China. According to Foshan Bureau of Foreign Trade data provided by Foshan South China Sea region during the first half of this year exports fell 40 percent aluminum, aluminum exports of some traditional profit margins less than 2%.
The South China Sea is just a sample, in Guangdong, aluminum companies across the country outside of the same situation. Fong A Board of Directors will be held in September issued a notice that by a loss of influence, since October, the company phased out under the big new Aluminum Co., Ltd. Jiangxi side of the aluminum production and operation of business; century, while Guanghua because raw material prices this year, compared with fast and product prices could not sync up, resulting in gross profit margin decreased aluminum, was recently issued a profit warning, saying full year 2008, an estimated loss of about 8.5 million yuan.
According to the China Nonferrous Metals Industry Association statistics, in 2007 China Aluminum Extruded capacity has reached 7.48 million tons / year, output of 6.9 million tons, apparent consumption of 5.94 million tons and export volume of 980,000 tons. Become the world’s largest aluminum producer and consumer, China has also risen to be the largest aluminum exporter.
“Last year a good year for this year, no longer.” Antaike aluminum Wei Dong Wang, senior analyst with emotion, export profits has been higher than the domestic sales in 2006, China’s aluminum exports of only 68 million tons, followed in 2007 shot up almost 50 %, and profits of enterprises to enjoy the feast. As the financial crisis broke out, Europe and the United States the general decline in the manufacturing sector, and the economic outlook continues to deteriorate very likely, the western countries aluminum consumption will be difficult to pick up the short term.
As China’s largest vertically integrated aluminum company, Nanshan Aluminum (600219.SH) inevitably affected by the economic trends, its 2008 third quarter net profit fell 52% year on year, only 129 million; Guangdong Jian Mei Aluminum Factory Co., Ltd. Deputy General Manager Liu Jianhui In an earlier interview with the media, also acknowledged that the company’s exports account for a large proportion of sales, “This year, affected by many factors, we are the world’s exports fell by 1 / 3.”
As China’s first top ten aluminum companies, Hing Fat aluminum, said in previous years, the export volume of 9.38% of its total sales, but this year the average monthly sales of 1 9 months a decrease of 600 tons, it is estimated this year’s export sales than in 2007 and by 4% 5% or so. Hing Fat aluminum semi annual report also revealed that its half year net profit of only 33.67 million yuan, compared with 224.59 million last year fell by about 85%.
“The reduction in net profit, there is a misreading of the market; the reduction in export sales, in addition to last year’s price increases are subject to export shipping, export tax rebate to reduce the amount of extrinsic reasons, but also have our initiative to adjust the export strategy considerations.” Hing Fat aluminum Industry Deputy General Manager Wang Zhihua, told reporters, Hing Fat aluminum is gradually transferred to the current production base in Sanshui Nanzhuang last year, the sale proceeds and listed Nanchuang venue to spend a total of 182.47 million yuan public offering, after deducting the cost of two parts, “Hing Fat aluminum In addition to pre tax operating profit in the first half, but decreased slightly from 51.4 million yuan at about 2.2% to 50.28 million yuan.
Wang Zhihua also said that a large number of European and American markets due to shrinking, the company has gradually placed on the export target markets in Central Asia, South America, Middle East and other emerging markets, will be part of to the domestic.
“This is a domestic market, growth is also slowing.” Wei Dong Wang told reporters, domestic market increase, representing 50% of the global market for more than an incremental, but important support incremental market has come from real estate, architecture aluminum profiles occupy China profile companies around 70% of capacity, because the domestic real estate to the credit crunch, the real estate market, weak demand and indirect “damage” to the aluminum companies.
Dali Town, Nanhai an aluminum company, told reporters that at present domestic enterprises are demanding buyers paid in full in cash directly to new orders, reduce credit, banks tightened credit, reduced the buyer’s cash flow, “manufacturers can only bring the total section be paid in installments, and we can arrange production according to the accounts. ”
July 1, 2007, aluminum products, the export tax rebate has been canceled; August 1, the Ministry of Finance announced the introduction of aluminum products for some 15% of export tariffs. Domestic exports of aluminum products for the door to further tightening.
“State and local governments if introduced an enterprise related policies such as tax breaks to restore export tax rebates, financial and administrative convenience, you can also help companies tide over the financial winter.” Nanhai Aluminum Association, an expert on the reporter who The above prescription.
Aluminum processing enterprises for the South China Sea, the present plight, November 6, deputy director of the Guangdong Provincial Foreign Economic and Trade Office Lianggui Xuan, Department of Finance officials such as Ji Fu Lin Hua, Deputy Director of the South China Sea visit to look into the industry.
Nanhai District Vice Mayor Wan Zhi Kang earlier in the meeting with the relevant non ferrous metal processing enterprises, said the South China Sea to be a substantial adjustment in next year’s financial expenditure for the enterprise “burden reduction.” , “Winter does not matter, the key to have quilts. The Government will provide timely help. Enterprises should also be fully prepared, and worked hard ‘internal strength’.”
“China’s aluminum industry, mixed, 690 million tonnes of production set in among hundreds of companies, the current financial tsunami, there is danger of organic, no doubt will accelerate the industry consolidation process.” Wei Dong Wang told reporters.
Data show, Hing Fat aluminum semi annual sales of 37.37 thousand tons from the same period last year an increase of about 24.1% to 46,389 tons, gross profit rose to 111.99 million yuan from 87 million yuan, and gross profit margin from 9.6% to further improve to 10.3%; Guangdong Feng aluminum from January to September this year, product sales increased by 14% over last year, from July to September, sales rose by 20%.
According to The Aluminum Association, the South China Sea, the current Emperor Ming Hing Fat aluminum and aluminum, Hui Long Aluminum contacts are more frequent, Ming Emperor aluminum for the Southwest and Northwest’s largest aluminum company, Hui Long Aluminum production is built with the Central Plains the largest aluminum production base.
“Companies do not give up any valuable investment opportunities, we will also examine the program in Guangdong Foreign Investment.” Wang Zhihua this is quite cautious.
In Beijing, the China Nonferrous Metals Association, recently proposed to increase the aluminum export tax rebates on aluminum ingot in goods such as six State Reserve policy, non ferrous metals association also moved the state has adopted policies to encourage joint ALUMINUM, start straight power supply; to maintain the aluminum industry, the credit size; increase the state’s investment, stimulating demand, with a view to save the domestic aluminum industry wide losses, tough city.
“In the last year, we have a gradual contraction in front, a solid international market, the original buyer at the same time, will be mainly based on domestic sales.” Wang Zhihua, said China is accelerating the process of heavy industrialization, the state approved the circulation of rural land means that there will be more farmers into the city, the scale of China’s urbanization will be further expanded, both of which would be of industrial and construction profiles profiles have higher demand, “So Hing Fat aluminum was mainly located in China, Hing Fat aluminum exports less than 10% of total sales.
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