China-based Hongqiao group’s aluminium output dropped to 5.622mn mt in 2020, down by 0.4pc from a year ago. The group maintained production around last year’s levels but benefited from the tight supply, higher aluminium alloy price and lower prices of raw material including alumina, bauxite and carbon anode blocks during the year.
Hongqiao earned profits of CNY10.495bn ($1.607bn), up by 72pc from the prior year with group revenue up by 2.3pc at CNY86.144bn. The average sales price of aluminium alloy rose by 2.2pc to CNY12,501/mt from the prior year. The aluminium alloy products division contributed 73.4pc to the group’s revenue with CNY63,257bn while the aluminium fabrication division accounted for CNY8.781bn with a 10.2pc share of revenues. The company benefited from China’s control over aluminium production through supply-side reform which helped the group offset the impact of the pandemic.
Outlook
The Hongqiao group believes growth in China’s construction and high-end manufacturing industries including auto and aviation will support the domestic economy. With the emphasis on energy efficiency and reduction of emissions, consumption of aluminium for rail transit and lightweight vehicles is expected to boost the total demand for aluminium and support the industry. However, there are uncertainties around global economic growth due to the ongoing impact of the pandemic.
Besides, the group also faces some uncertainties arising from trade frictions, environmental policies, adjustments to business structure, etc.
($1=CNY6.528)