Market watchers paint a mixed outlook for China downstream aluminium industry

Aluminium rolled product manufacturers and aluminium alloy processing companies in China are about to witness an explosive growth in demand for their products as rise in demand for lighter vehicles is on the forecast.

According to the ambitious Made-in-China 2025 Plan, average weight of vehicles made in the country will be reduced by 5-20 per cent by 2020 through the strategic use of high-strength steel, aluminium-magnesium alloy and other composite materials in car bodies.

Piggybacking this demand for lighter vehicles demand for automotive aluminium rolled products in China domestic market is set to increase by 562.5 per cent to reach a whopping 544,000 tonnes by 2020, from the current 82,000 tonnes usage in 2016. The CAGR forecasted for the period is 60 per cent.

Aluminium extrusion production in China, on the other hand, stands to be hit badly due to the ongoing pollution control inspections.

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According to a recent survey by Shanghai Metals Market, about 110 SME and MSMEs engaged in the manufacturing of aluminium extrusion products have shut down their units across Shandong, Foshan and Hebei. The shutdowns have affected nearly 2 million tonnes aluminium extrusion capacity.

A few aluminium extrusion producers are also considering relocation of their plants in order to avoid strict environmental protection inspections, SMM learnt.