aluminium show | Aluminium industry trends in 2024 and a view of the future of the aluminium industry

Aluminium show learned that with the launching of the EU Carbon Border Adjustment Mechanism (CBAM) in October 2023, the impact on China's aluminium exports is expected to be in the range of 300,000 tonnes, with a greater impact on aluminium sheet and strip manufacturers. In addition, the proportion of low-carbon aluminium capacity is expected to reach 21.4% by 2024 and 24.1% by 2025. Meanwhile, due to the limitations of the electrolytic aluminium capacity ceiling, the development opportunity of recycled aluminium is huge. It is expected that the scale of recycled aluminium can reach 11.5 million tons by 2025, with a CAGR of 9.96% from 2022-2025, which is the fastest growth rate among several non-ferrous metals. As for recycled aluminium, 70% will be used for transportation, 15% for electronics and 10% for construction.

In terms of demand, photovoltaic and new energy vehicles are the main application sectors to drive demand. It is expected that in 2023, the proportion of aluminium used in transportation will reach 23% and construction is basically the same. And by 2024 the transport and power sector will consume more aluminium than the volume in construction sector, accounting for 23%, 23%, 22% respectively. A small surplus is expected in Q4 2023, with 400,000 tonnes accumulated in Q1 2024 and 425,000 tonnes de-stocked in Q2 '24. There is a shortfall for the whole in 2024.

In electrolytic aluminium, after 2020, imports increased, because that year for the completion of the big year, strong domestic demand pushed up the import demand. And after 2022 import profits weakened but imports declined mainly due to China's imports of large quantities of Russian aluminium, in essence, with the existence of Russia's alumina, electrolytic aluminium replacement.

As for aluminium materials, the growth in exports over the past few years is mainly due to the increase in total overseas demand and the increase in our share of the overseas market, while the fluctuations in export volumes are caused by changes in the internal and external price ratios. In addition, CBAM will be formally implemented in 2027 after a trial run from October 2023, and will gradually reduce the free quota to zero from 2026 until 2034 onwards. Ultimately, the cost of China's aluminium exports is expected to increase by RMB 1,412-2,219 per tonne, with carbon tariffs increasing costs by 7%-11% of the export price.