----Interview with Anquan Zhang
Vice President
Anshun Zhongtai Xinbo Aluminum Co., Ltd.
Anshun Zhongtai Xinbo Aluminum Co., Ltd. is a joint-stock private enterprise specializing in aluminum ingot production technology management and related trade. Established in October 2023 with a registered capital of 100 million yuan, the company is located in the industrial park of Caiguan Town, Anshun City, Guizhou Province—an area known for its beautiful scenery and convenient transportation.
Asian Metal: Welcome Mr. Zhang to the interview by Asian Metal, could you please give us a brief introduction to your company first?
Mr. Zhang: Our company employs over 400 people and has built a strong management team, robust technical capabilities, and a wealth of talent. We are committed to the 100,000-ton aluminum ingot energy-saving technical transformation project now. As the primary entity responsible for this project, and with strong support from various levels of government, we have made significant progress. After nearly a year of preparation and construction, we successfully put part of the aluminum ingot production line into operation at the end of August last year. The energy-saving transformation has already shown promising results. Our next goal is to ensure the full and efficient operation of all aluminum ingot production units in a safe and stable manner as soon as possible, contributing to the local economy. So far, we have invested more than 300 million yuan in this technological transformation, involving 205 units of 240kA electrolytic cells, with 70 units already operational. Moving forward, we also plan to expand into high-value-added aluminum alloy deep processing and recycled aluminum alloy projects.
Asian Metal: How is the current progress after you started commercial production since last September?
Mr. Zhang: We are currently in the process of ramping up production. So far, we have successfully started 100 electrolytic cells, and we plan to complete all 205 units in the first half of this year. However, the startup process comes with high power consumption, which puts significant pressure on our production costs. Additionally, fluctuations in alumina prices have affected our costs. In Q4 last year, as alumina prices surged, our production cost peaked at RMB23,800/t (USD3,285/t). Fortunately, it has now dropped to RMB21,000/t (USD2,899/t), and as we continue to increase operating capacity, we expect further cost reductions.
Asian Metal: Since September last year, aluminum ingot prices have been rising. What do you think are the key drivers behind this trend?
Mr. Zhang: Since September last year, the price of aluminum ingot has risen from RMB19,200/t (USD2,650/t) to a peak of nearly RMB22,000/t (USD3,037/t) in early November. I believe this is mainly due to three factors. First, the Federal Reserve's interest rate cuts since September have created a favorable environment for commodities. Second, the "Golden September and Silver October" period marks a peak season for aluminum consumption, especially in industries such as real estate, solar photovoltaics, and new energy vehicles. Additionally, government policies, including home appliance replacement subsidies and rural new energy vehicle incentives, have significantly boosted aluminum demand. Third, in the second half of the year, China's state reserves conducted some aluminum ingot operations, further driving up prices.
Asian Metal: In the second half of last year, alumina prices surged sharply, but aluminum ingot prices did not rise at the same rate. What caused this discrepancy?
Mr. Zhang: Alumina prices did indeed see an abnormal surge in the second half of the year. While prices had been gradually increasing since the first half of the year, the slope of the price curve remained moderate. However, from late September onwards, alumina prices skyrocketed, reaching a peak of RMB5,800/t (USD801/t). I believe this sharp rise was primarily due to bauxite supply shortages. Domestic bauxite production was restricted by environmental and safety regulations, leading to supply gaps that could not be immediately filled by imports. Additionally, market speculation and financial market disruptions exaggerated the impact of these shortages, further driving up prices. Meanwhile, aluminum ingot prices did not follow the same upward trend because the market remained well-supplied. Most industry participants believed the alumina price surge was a short-term speculative movement and expected a significant price correction by early 2025.
Asian Metal: Many aluminum ingot producers have suffered losses due to rising alumina costs. Has your company been affected?
Mr. Zhang: Since our plant is still in the early stages of production, our profitability was already expected to be weak, even before the alumina price spike. The initial phase of aluminum ingot production requires high power consumption, leading to elevated costs. With the extreme increase in alumina prices during Q4, we inevitably incurred losses. However, as alumina prices have started to decline and our power consumption efficiency improves, our production cost has dropped to around RMB21,000/t (USD2,899/t). Currently, our aluminum ingot power consumption is 17,500kWh/t, and we expect to reduce it further to 13,400kWh/t.
Asian Metal: In mid-November, aluminum ingot prices began to decline, yet alumina prices continued to rise. What caused this trend?
Mr. Zhang: By mid-November, the impact of China's 12-trillion-yuan debt policy had already been absorbed by the capital market. Additionally, the government announced the cancellation of the aluminum export tax rebate policy, which put downward pressure on aluminum prices. Due to these two factors, aluminum ingot prices fell from RMB21,700/t (USD2,995/t) in early November to RMB19,600/t (USD2,705/t) in early January, 2025.
Asian Metal: Now that alumina prices have dropped to around RMB3,250/t (USD449/t), do you think aluminum ingot prices will also decline sharply?
Mr. Zhang: Currently, China's operating capacity for aluminum ingot production exceeds 43 million tons, approaching the industry ceiling of 45 million tons. In 2025, no new production capacity is expected to come online, while demand is projected to grow by 2-3%. Given these factors, I believe aluminum ingot prices will remain relatively stable and will not experience a sharp decline.
Asian Metal: What is your outlook for aluminum ingot prices in the first half of this year?
Mr. Zhang: We anticipate that aluminum ingot prices will experience high volatility, remaining in the range of RMB20,000-21,000/t (USD2,760-2,899.t). Between April and May, aluminum ingot prices are expected to rise to around RMB21,000/t (USD2,899/t), coinciding with the peak consumption season. This year, the new energy vehicle and solar photovoltaic industries will continue to be the major demand drivers, while aluminum consumption in the real estate sector is expected to remain stable compared to last year.
Asian Metal: Thank you for your wonderful sharing and we wish you continued success in the future!
