Extruded aluminum giant China Zhongwang Holdings Ltd said last week that it expected the first production line at its Tianjin plant to come online by the end of the year. The firm anticipates that the new production line will help it tap into the ever-expanding automotive aluminium market.
According to reports, the project will cost US$4.79 billion, and will have a nameplate capacity of 1.8 million metric tons.
“In the future, we will upgrade from a supplier of aluminum products to a supplier of comprehensive lightweight solutions,” said Zhongwang executive director and president Lu Changqing. “The high-end products will account for 80 percent of our revenue in five to eight years.”
Data from the Ministry of Industry and Information Technology indicate that China’s automakers used 3.12 metric tons of aluminium alloy products in 2015, which is good for a year-on-year increase of 3.2%. Estimates indicate that China could consume up to 14 million metric tons of the element, making it both the fastest-growing market and potentially the consumer of half of all aluminium used on Earth.
Experts continue to point out the desirability of aluminium in the automotive industry, as it is under increasing pressure to lower weight and improve gas mileage.
“Aluminum alloy is one of the major choices to reduce auto weight, and, therefore, the consumption of gasoline,” explained Chen Quanxun, chief of China Nonferrous Metals Industry Association. “We can expect such companies to benefit from the trend in the following decade.”
This report comes on the heels of the surprise announcement last week that Zhongwang USA LLC, a firm owned by China Zhongwang’s Liu Zhongtian, purchased Aleris Corporation for US$2.33 billion. The purchase represents a Zhongwang foot in the automotive aluminium production door on the North American continent.
Although Zhongwang has not officially announced any relationships with automakers, sources indicate such relationships may exist with China’s Brilliance Auto Group, FAW Group Corporation, and Chery Automotive Co. Ltd.