China’s aluminum foil market is oversupplied and overcapacity
According to public information and statistics from the China Nonferrous Metals Processing Industry Association, China’s aluminum foil consumption showed an increasing trend from 2016 to 2018, but in 2019, there was a slight decline in aluminum foil consumption, about 2.78 million tons, a year-on-year decrease of 0.7%. According to forecasts, in 2020, China’s aluminum foil consumption will maintain the same growth as production, reaching about 2.9 million tons, a year-on-year increase of 4.32%.
Judging from the production-to-sales ratio of China’s aluminum foil in the domestic market, the production-to-sales ratio of China’s aluminum foil generally hovered around 70% from 2016 to 2020, indicating that China’s aluminum foil production scale is much higher than the consumption scale, and China’s aluminum foil overcapacity situation is still serious, and In 2021, China’s aluminum foil production capacity will continue to grow rapidly, and the overcapacity may further intensify.
China’s aluminum foil sales volume is large, and its export dependence is strong
From the perspective of the export market of China’s aluminum foil, the export volume of China’s aluminum foil was large in 2015-2019, and showed an upward trend, but the growth rate slowed down. In 2020, due to the impact of the epidemic and international relations, the export volume of China’s aluminum foil dropped for the first time in five years. The annual export of aluminum foil was about 1.2239 million tons, a year-on-year decrease of 5.5%.
From the perspective of the market structure of China’s aluminum foil, China’s aluminum foil is too dependent on the international market. From 2016 to 2019, the proportion of China’s direct exports of aluminum foil was higher than 30%. In 2020, the proportion of China’s direct exports of aluminum foil decreased slightly to 29.70 %, but the proportion is still too large, and the potential market risk is relatively large.
Development prospects and trends of China’s aluminum foil industry: domestic demand still has room for growth
According to the production and consumption of aluminum foil in China, it is expected that the production and sales of aluminum foil in China will show the following development trends in the future:
Trend 1: Maintaining the status of a major producer
Not only has China’s aluminum foil production ranked first in the world, but also the product quality and production efficiency of the first-tier enterprises have also ranked first in the world. China’s aluminum hot rolling, cold rolling and foil rolling production capacity accounts for more than 50% of the global production capacity, and the casting and rolling production capacity accounts for more than 70% of the global aluminum production capacity. It is the absolute largest producer of aluminum sheet, strip and foil in the world. This situation will not change in the next five to ten years.
Trend 2: The rising trend of consumption scale
With population growth, rapid urbanization, increased life expectancy, and growing healthcare needs, demand for aluminum foils such as packaged food and pharmaceuticals continues to grow due to growth in end-use consumption. In addition, China’s per capita aluminum foil consumption still has a big gap with developed countries, so it is expected that China’s domestic demand for aluminum foil still has a lot of room for growth.
Trend 3: Export Dependence Continues to Maintain
China’s existing aluminum foil production capacity far exceeds domestic demand, which can be said to be obviously surplus, so it is increasingly dependent on exports. According to the data of the United Nations General Administration of Trade, China’s export of aluminum foil accounts for about one-third of China’s output. China has become the world’s largest exporter of aluminum foil products, and its export volume is basically the same as that of other countries in the world. China’s massive exports have also led to intensified trade frictions, making it unsustainable to expand exports.
To sum up, it is expected that driven by the expansion of application fields, the development of production technology and the environmentally friendly characteristics of aluminum foil, China’s aluminum foil consumption will still maintain a certain degree of growth in the future.
Post time: Jun-16-2022