In 2023, with the support of macroeconomic and industrial favorable policies, the overall scale of domestic aluminum consumption is expanding, and the traditional markets such as building structure and durable consumption are picking up and the emerging fields represented by the "new three types" continue to make up for the gap caused by the decline in aluminum exports, and the overall demand performance of the domestic market is higher than expected. Yuefeng Aluminum estimates that the full-caliber domestic aluminum consumption in 2023 will reach 47.86 million tons, a record high, an increase of 7.6% over 2022, and a growth rate of 6.3 percentage points.
Yuefeng Aluminum believes that China's aluminum consumption in 2023 presents the following characteristics:
The rebound in consumption growth does not change the long-term trend of slowing aluminum consumption growth
As the world's largest aluminum consumer, China's consumption growth momentum is weakening under the background of the macroeconomic "new normal". As an important indicator to measure the consumption boom in the inner cycle market, the growth rate of full-caliber domestic aluminum consumption shows a downward trend. The rebound in consumption growth in 2023 has not deviated from the development law of aluminum consumption, and the narrowing of growth rate in 2024 is still a high probability event, and the overall aluminum consumption market in China is slowly approaching the "peak platform". Full-caliber domestic aluminum consumption is expected to be 48.67 million tons in 2024, an increase of 1.7% from 2023.
Growth momentum has shifted from exports to the domestic market
In 2023, under the influence of factors such as the overall downturn in overseas consumption and the pressure to go to storage, China's aluminum exports fell significantly after hitting a new high for two consecutive years, with annual exports of 5.25 million tons, down 14.5% from the previous year, and the largest decline since 2010. Among them, aluminum plate and aluminum foil exports have fallen by more than double digits. Comprehensive exports of unforged rolled aluminum and alloys, exports in 2023 totaled 5.64 million tons, accounting for 10.5% of full-caliber aluminum consumption, down 2.3 percentage points from the previous year. In 2023, the contribution of exports to the growth rate of China's all-caliber aluminum consumption is negative, and the domestic market has become a key force driving aluminum consumption.
The housing market is picking up, but not sustainably
Building structure as the largest domestic aluminum consumption area, after experiencing the market downturn in 2022, demand in 2023 ushered in a rebound, aluminum consumption reached 15.6 million tons, an increase of 5.4% over the previous year, but still not back to the level of 2020 and 2021. The completed area of housing in the real estate industry is closely related to the consumption of aluminum in the field, with the support of the relevant policies of "guaranteeing the delivery of buildings", the completed area of housing in 2023 in China reached 998.31 million square meters, an increase of 17%, the rapid growth of the index is also related to the development of the domestic real estate industry in 2020-2021, and the sales project is more related. Judging from the logical relationship, the completed area indicator is about 2-3 years behind the newly started area. Therefore, due to the rapid decline in the growth rate of new construction area since the second half of 2021 and the overall decline in 2022, the growth rate of completed area is expected to decline passively in 2024 and return to negative growth. Yuefeng Aluminum is expected to consume 15.2 million tons of aluminum in the domestic building structure field in 2024, a decrease of 2.5%. Its share in the domestic consumer market has gradually declined, reaching 39.4%, 38.1% and 32.9% in 2017, 2020 and 2023, respectively, and is expected to fall to 31.5% in 2024.
The role of emerging markets in driving growth is obvious and will continue
The fields of new energy vehicles, photovoltaic and lithium batteries are the "new three types" of aluminum consumption that have been widely concerned in recent years, and are in the period of market explosion, which has an obvious role in promoting the growth of aluminum application.
New energy passenger cars
In 2023, China's new energy vehicles continue to maintain a prosperous situation of production and sales, with the output of 9.587 million units, an increase of 35.8%. Among them, the output of new energy passenger vehicles was 9.117 million, accounting for 95% of the output of new energy vehicles. Yuefeng Aluminum estimates that the demand for aluminum for new energy passenger vehicles is 2.34 million tons, an increase of 37.4%. New energy vehicles will continue to maintain strong momentum in 2024, with aluminum consumption forecast to reach 2.9 million tons, an increase of 24% from the previous year.
Solar power
National Energy Administration data show that in 2023, the domestic new photovoltaic installed capacity of 216.9GW, an increase of 148%, another record high; The cumulative installed capacity reached 609GW, surpassing hydropower to become the second largest power source in the domestic power generation industry; The estimated export of photovoltaic modules is 188GW, an increase of 21.4%; It is estimated that the annual output of photovoltaic modules reached 490GW, an increase of 69.7% over the previous year. Antaike comprehensively considers the photovoltaic module frame, aluminum bracket for the color steel roof of the distributed power station, inverter for photovoltaic power station, aluminum cable and other aluminum, and estimates that the aluminum consumption of the domestic photovoltaic industry in 2023 will be 3.13 million tons. In 2024, the expansion of domestic photovoltaic capacity will continue, and the growth of domestic and foreign terminal demand has a high certainty, and photovoltaic is still one of the aluminum application areas with great growth potential. Yuefeng Aluminum is expected to consume nearly 4 million tons of aluminum in the domestic photovoltaic industry in 2024, an increase of 27.5%.
Aluminum foil for battery
In recent years, the rapid development of the lithium battery industry chain has led to the consumption growth of aluminum materials such as battery aluminum foil, aluminum battery shell, and aluminum battery tray, and battery aluminum foil has become one of the investment focuses. According to the data released by the China Automotive Power Battery Industry Innovation Alliance, in 2023, the total output of power and other batteries in China will be 778.1GWh, an increase of 42.5%; The total sales volume was 729.7GWh, of which the power battery was 616.3GWh, an increase of 32.4%, accounting for 84.5%; Exports totaled 152.6GWh, an increase of 124%, of which power batteries 127.4GWh, an increase of 87.1%, accounting for 83.5%. Antaike estimates that the consumption of battery aluminum foil in 2023 will be 375,000 tons, an increase of 25%; Among them, the consumption of power battery foil is about 274,000 tons, an increase of 22%. In 2024, the lithium industry will maintain slow growth, and the pressure on storage will continue. In terms of battery aluminum foil, the pressure has continued since 2024, and the price of power battery foil is still bottoming out, but overall, the demand for battery aluminum foil is still expected to maintain growth. Yuefeng Aluminum expects that in 2024, China's demand for battery aluminum foil will reach 440,000 tons, an increase of 17%.
To sum up, the above "new three types" of aluminum consumption in 2023 is 5.845 million tons, a net increase of 1.925 million tons compared with 2022, accounting for more than 60% of the net increase of full-caliber domestic aluminum consumption in 2023, and the demand pulling effect is obvious; It is expected that the consumption of this part will increase to 7.34 million tons in 2024, a net increase of about 1.5 million tons from 2023, an increase of 26%, significantly exceeding the growth rate of full-caliber domestic aluminum consumption, and continuing to drive the growth of aluminum consumption.
Consumption of recycled aluminum has accelerated
In recent years, the global level of green and low-carbon development of aluminum and related industries has continued to improve, and more and more aluminum downstream end users have put forward carbon footprint requirements for raw materials. Coupled with the increasing supply and import volume of domestic recycled aluminum raw materials, the utilization of recycled aluminum has begun to enter a new stage. In 2023, the domestic production of recycled aluminum will reach 9.5 million tons, the comprehensive import and export of aluminum alloys, and the consumption of recycled aluminum will reach 9.89 million tons, an increase of 8.6%, an increase of 1.4 percentage points over the previous year; In the same period, domestic primary aluminum consumption was 42.84 million tons, an increase of 4.3%, compared with recycled aluminum consumption growth faster. In 2015, 2020 and 2023, the ratio of recycled aluminum consumption to primary aluminum consumption was 0.18, 0.20 and 0.23, respectively, and the rising trend was obvious. Yuefeng Aluminum expects that domestic recycled aluminum consumption will reach 10.87 million tons in 2024, an increase of about 10% over 2023, and recycled aluminum consumption will reach more than 1/4 of primary aluminum consumption.
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