Aluminum rod demand to shrink in H1 on economic downturn
----Interview with Li Zhiqiang
General Manager
Chongqing Jinlan Aluminum Product Co., Ltd.
- Chongqing Jinlan Aluminum Products Co., Ltd. was founded on 8 April, 2015 and is wholly owned by Guangdong Jinlan Group. We mainly focus on production, processing and sales of aluminum rod, section, plate, strip and relevant products; we also process and sell raw materials of aluminum products, apparatus, machinery and accessories. Our annual production capacity for aluminum products is 70,000t.
- Asian Metal: What's your main business in 2019 and do you have any new projects?
- Mr. Li: We have four production lines in total; one is for aluminum bus bar production and three are for aluminum casting plate and aluminum rod production. As the aluminum rod market is sluggish this year, we would focus on the production of aluminum bus bar and casting plate. Our aluminum bus bar is mainly exported to Italy, Dubai, etc. We are building an aluminum ingot production line which could also produce high-end aluminum rod.
- Asian Metal: The production of aluminum rod, plate and strip is greatly affected by the real estate industry. How do you think of the property market this year?
- Mr. Li: The real estate industry runs steadily now and would be demand-oriented again. After two-year policy control, inventory of property dropped a lot. The operating rate of the industry hit the bottom in the first half of this year but would increase in the latter half, and this would pull up the demand for aluminum plate and construction material. However, the real estate industry would not surge again.
- Asian Metal: The economy is under downward pressure this year. Will the demand for aluminum rod shrink in the first half of this year?
- Mr. Li: With global growth slowing down, China's economic growth is also under downward pressure and China has set a lower economic growth target of 6-6.5 percent this year. Accordingly, the private enterprises will find difficulty in financing and the demand for aluminum rod would shrink in the first half of this year.
- Asian Metal: In 2019, the environmental protection policy is still strict. Will that affect your production?
- Mr. Li: The economy development should not come at the cost of environmental destruction and we need to leave a good environment for future generations. We pay much attention to environmental protection and have installed relevant facilities and own relevant procedures, so we would see little impact from the policy.
- Asian Metal: Who are your main customers and what is the biggest problem you've encountered?
- Mr. Li: Our downstream customers are mainly from primary aluminum plants, the construction industry, auto industry and household appliance industry. Our problem is the financial strain. We installed environmental protection facilities and raised remuneration for workers; in addition, the rising raw material prices pushed up the production cost. However, market transactions were limited under the sluggish economic situation.
- Asian Metal: Did the China-US trade war affect your company?
- Mr. Li: We mainly exported to the Middle East and Europe with no material to the US, so the trade war didn't influence our business directly. However, as China's economy saw a recession on the whole, companies in various sectors, including us, have been impacted indirectly. We hope the trade dispute could be resolved peacefully soon.
- Asian Metal: What's your development plan in the future?
- Mr. Li: We plan to extend the downstream industrial chain and improve the technology to raise added value of products. We are building a new production line for high-end aluminum plate and rod and will expand the capacity later.
