Aluminium and Magnesium Deep Processing Enterprises Benefit from Lightweight Vehicle Market

The automotive lightweight market is gradually starting to take off, and some companies positioning aluminum-magnesium deep processing are beginning to benefit. In the A-share market, some companies with early-stage layouts have a harvest period.

The semi-annual report released by Mingtai Aluminum yesterday showed that in the first half of 2016, the company achieved a total operating revenue of 3.3 billion yuan, a year-on-year increase of 1.8%; net profit after deducting non-recurring gains and losses was 119 million yuan, a year-on-year increase of 42%. The rapid growth of Mingtai Aluminum's performance shows the initial results of the transformation.

In the past two years, Mingtai Aluminum has built two automotive aluminum projects. The 200,000 tons of “high-precision aluminum strip project for transportation” funded and invested by the company has been put into production, but further optimization and debugging are needed. Company officials revealed to reporters yesterday that it is expected that the project will take two years to reach production. Some analysts believe that with the further release of new aluminum production capacity for the company's transportation, sustained high growth will be worth the wait.

Mingtai Aluminum also invested in the construction of a 20,000-ton aluminum profile project for transportation. The project is expected to start production within the year. The company’s shareholding subsidiary, Zhengzhou CRRC, has agreed to give priority to the purchase of company’s products.

Yunhai Metals has already tasted the sweetness of car lightening. The semi-annual report shows that from January to June 2016, Yunhai Metals realized operating revenue of 1.769 billion yuan, an increase of 18.90% year-on-year, and net profit of 69.903 million yuan, an increase of 363.01% year-on-year.

The magnesium plate business made a significant contribution to the growth of Yunhai Metals' profit. In the first half of the year, Yunhai Metal Magnesium Alloy achieved gross profit of 94.145 million yuan, an increase of 14.29% year-on-year, accounting for 38.80% of the total gross profit of the company's main business and an increase of 20.53 percentage points over the same period last year.

Since the beginning of this year, with the supply contraction of equipment maintenance and reluctant sales, magnesium prices have rebounded sharply, and the price of magnesium ingots has rebounded from 12,000 yuan/ton at the beginning of the year to the current 14,700 yuan/ton, or 22.5%.

Yunhai Metals is the global leader in magnesium alloys, which accounts for more than 30% of global sales. The company's business runs through the upstream and downstream of the magnesium industry chain. At present, the original magnesium production capacity is 100,000 tons. It is distributed in Wutai Yunhai, which is rich in raw materials dolomite, and Yunhai in Chaohu; Magnesium alloy production capacity is 170,000 tons, distributed in the economically developed Yangtze River Delta and Pearl River Delta. Chaohu, Suzhou and Huizhou subsidiaries.

Magnesium alloys are mainly used in automotive, 3C products, tools, aerospace, rail transportation and other fields, most of which are used in automotive, 3C product areas. It is reported that companies involved in the light weight of automobiles include Nanshan Aluminum, Asia Pacific Technology, and Liyuan Refinement.