Aluminium alloys producers who are concerned about global overcapacity are unlikely to be cheered by the latest report regarding China’s Zhongwang Holdings Ltd.
An online report by the China Daily newspaper says Zhongwang’s massive aluminium alloys complex in Tianjin, China, will be producing output by the end of 2016.
The Zhongwang facility in Tianjin is described as a €4.26 billion ($4.79 billion) complex that when finished will be able to produce 1.8 million tonnes per year of aluminium alloys, which are used widely in the transportation and aerospace sectors.
The new complex will focus on the production of aluminum flat rolled products, according to the firm. Just one of what will be several production lines is expected to start up before the end of 2016.
The same China Daily report indicates automakers based in China consumed 3.12 million tonnes of such alloys in 2015, meaning the new complex alone can serve more than half of that market. The report says vehicle lightweighting is likely to lead to greater aluminium alloys consumption by 2020, however.
China Zhongwang Holdings Ltd. describes itself on its website as “the second largest industrial aluminium extrusion product developer and manufacturer in the world and the largest in Asia.”
The alloys and die cast and extruded aluminium products made by the company traditionally consume considerable volumes of aluminium scrap. The Zhongwang website, however, makes no references to scrap but instead refers to bauxite and ore reserves that can be tapped into throughout China.
In late August 2016, a United States-based subsidiary of Zhongwang announced it had agreed to purchase U.S.-based aluminium producer Aleris Corp. Aleris focuses on rolled aluminium products and operates 14 facilities, with the majority in North America but others in Europe and China.
Provided that sale receives regulatory approval, it is scheduled to close in the first quarter of 2017.