"One Belt and One Road" planning will lead Zhongwang and other aluminum processing companies to take advantage of the opportunity

China will invest US$40 billion to establish a Silk Road Fund to provide investment and financing support for projects related to interconnection and interlinked infrastructure such as infrastructure, resource development, industry, and financial cooperation along the “One Belt and One Road” initiative. At the just-concluded APEC meeting, this Heavy news sparked thousands of waves.

Many agencies believe that the “One Belt and One Road” strategy will drive the development of railway transportation in China and the entire Asia-Pacific region, bringing new business opportunities to the transportation and other industries and their upstream and downstream industrial chains; and it will be applied in the field of rail vehicles, especially high-speed railways. A wide range of aluminum alloy car bodies is expected to benefit from the "Belt and Road Initiative", ushering in a new opportunity for the development of aluminum processing industry for transportation, and it will become a fast-growing point for the domestic consumption of aluminum profiles.

However, the technical requirements of aluminum profiles for rail transit bodies are relatively high. There are not many enterprises that can produce such products in China. The enterprises that meet the requirements for high-speed rail industrial aluminum products are even rarer, for example, aluminum products suitable for use in alpine regions are only available. China Zhongwang and other top domestic aluminum processing companies have production capacity. Therefore, the industry believes that a group of leading companies represented by China Zhongwang are most likely to benefit from the “One Belt One Road” initiative.

"One Belt and One Road" started soon and aluminum processing welcomed the opportunity

“One Belt and One Road” refers to the “Silk Road Economic Belt” and “21st Century Maritime Silk Road”. Among them, the “One Belt” includes six corridors: the New Eurasian Continental Bridge, the Central Iraqi Earth Corridor, the China-Pakistan Corridor, the Bangladesh-Indian-Burmese Corridor, the China-New Zealand Corridor, and the China-Mongolia-Russian Grand Corridor. “One Road” refers to the establishment of several ports at sea. The fulcrum, which runs through the Eurasian continent, connects the Asia-Pacific economic circle to the east and the European economic circle to the west.

In September 2013, China’s national leaders first proposed the “Silk Road Economic Belt” during their visit to Kazakhstan; in October 2013, during the informal meeting of the Asia Pacific Economic Cooperation Organization (APEC) leaders, China creatively proposed It is willing to strengthen maritime cooperation with ASEAN countries and jointly build the "21st Century Maritime Silk Road."

At the just-concluded APEC meeting, China stated that it will invest US$40 billion to establish a Silk Road Fund to provide investment and financing support for projects related to interconnection and intercommunication, including infrastructure, resource development, industry, and financial cooperation along the “One Belt and One Road” initiative; and Proposed to break through the transportation infrastructure and realize the early harvest of interconnection and interflow in Asia, and prioritize the deployment of railway and highway projects in China with its neighboring countries.

Minsheng Securities believes that the “Belt and Road” will focus on solving the problems of overcapacity and resource acquisition in China. There are three points of force: access, navigation and trade. Specifically, it is based on access and navigation, which exports China’s excess production capacity and imports China’s necessary resources. The countries explored by the “One Belt and One Road” are rich in various kinds of mineral resources that China urgently lacks. The “One Belt, One Road” involves access, navigation, and commercial communications. It covers companies in the building materials, transportation, and oil and gas industries, among which railway construction companies and transportation equipment manufacturers will benefit directly. The “One Belt and One Road” initiative will accelerate the pace of infrastructure construction. The construction of high-speed rail and high-speed European and Asian high-speed railways in the Midwest will raise the demand for vibrating vehicle groups.

In recent years, the construction of China's high-speed rail system and the development of urban rail transit systems have accelerated, and aluminum alloy car bodies have been widely used in the field of rail vehicles. Aluminum profiles and aluminum plates have become the main materials of rail vehicle bodies. Under normal circumstances, the procurement of aluminum materials for each high-speed train is about 10 tons, of which about 8 tons of extruded profiles and about 2 tons of other (plates, foils, pipes, wires, forgings, etc.). Industrial Securities said that as one of the very few large-scale manufacturing equipments in China that autonomously masters a full set of core technologies, high-speed rail has become an important carrier for the "One Belt and One Road" strategy.

High-end aluminum processing market is widely recognized in China's manufacturing

“One Belt and One Road” has provided a new opportunity for the development of the aluminum processing industry. Coupled with the increasing demand for environmental protection and light weight, the high-end aluminum processing market in China will also grow wider.

According to data released by the National Railway Administration in early 2014, the “High Speed ​​Railway Development in China” shows that in 2014, China will have 12 high-speed rails built and operated, with a total length of 5353 km, plus 12 new production lines in 2015. Within the next two years, The total mileage of production and operation will reach 8,887 kilometers. It is expected that the domestic passenger dedicated line will require about 28,000 high-speed trains from 2014 to 2020.

High-speed trains with speeds over 200 kilometers per hour have high requirements for light weight, tightness, and corrosion resistance, while aluminum has characteristics such as light weight, corrosion resistance, and strong plasticity, which makes aluminum profiles have absolute advantages in the application of rail vehicles. The vehicles running on high-speed railways are basically aluminum profiles. This also means that the trains required for the operation of China's high-speed railways planned by the National Railway Administration will have a huge demand for high-end aluminum processing products.

In addition to high-speed railways, the demand for aluminum in the urban rail transit market cannot be underestimated. At present, China's urban rail transit mainly includes two forms of subway and light rail. From the body materials, it mainly includes two kinds of aluminum alloy cars and stainless steel cars. At present, the two types of vehicle bodies account for 50% each according to different urban environments and requirements. The total length of the rail transit network for urban planning and construction in China has reached 5,000 kilometers, and the total investment is estimated to exceed 800 billion yuan. According to the overall calculation, urban rail transit will need to purchase 2000 aluminum alloy vehicle vehicles and about 16,000 tons of aluminum extrusion profiles each year.

The "bigger cake" also includes overseas markets. The export of China's rail transit equipment has finally reached the top markets in the world after undergoing three major transformations from parts exports to complete vehicle exports, from mid- to low-end products to high-end products, and from under-developed markets to developed markets.

On October 23, 2014, the Massachusetts Department of Transportation (MBTA) formally approved that it will purchase 284 subway cars from China North Locomotive and equip the Boston Red Line and the Orange Line subway. This is the first time that China's rail transportation equipment companies have won the US landing in the tender for the United States.

According to statistics of the German authority SCIVerkehr, the United States is the second largest railway market in the world after China, and the demand for rail transit vehicles is relatively strong. This time entering will lay a foundation for performance and brand effect for China's high-end equipment manufacturing to further explore the US market, and will be conducive to the advancement of the global market.

In addition to the aluminum profiles for rail transportation, aluminum profiles for automobiles are also in demand. As environmental protection and energy saving requirements become increasingly stringent, the reduction in the weight of automobiles has become a trend in the development of the world's automobiles. The density of aluminum is about 1/3 of that of steel. If aluminum is used instead of steel to make cars, it can reduce the weight of the vehicle by 30% to 40%. The weight of the manufactured engine can be reduced by 30%. The aluminum radiator is 20% lighter than the same copper product. 40%, aluminum wheels can be reduced by about 30%. In the next ten years, the aluminum penetration rate of all major automotive components will increase significantly. With the advancement of vehicle manufacturing technology in China's automobile industry and the development of automotive weight reduction, aluminum profiles for automobiles will continue to increase. It is predicted that by 2020, China's auto production will reach 25 million units, and the demand for aluminum profiles will be around 750,000 tons.

In addition, aluminum is an advanced material for the construction of marine and marine engineering structural parts. Aluminum alloys are light weight, strong mechanical properties, and corrosion resistance, making them the materials of choice for modern ships. Ships made of aluminum alloys have features such as high speed, long service life, high load capacity, and low maintenance cost. According to statistics, with the development of ocean-going fisheries and the urgent need for declaration of maritime sovereignty, nearly 100,000 fishing vessels in China need to be upgraded from steel vessels to aluminum fishing vessels that can be operated offshore.

Industry pioneers seize the high-end market

The world’s two largest manufacturers of rail transit equipment, CNR and CSR, are expected to merge again after 15 years of separation, forming a joint force for the “going out” of HSR. Once the merger is successful, China will produce a rail transit equipment manufacturing enterprise with a total asset of up to 300 billion yuan, and become a "giant" in global rail transit equipment manufacturing. Under the “One Belt and One Road” initiative, several top aluminum processing companies that have started cooperation with CNR and CSR have begun to take action.

China Zhongwang is the world's second largest manufacturer and exporter of industrial aluminum extrusion products, and is also a partner of CNR. In the first half of this year, the company won the bid for the Fuzhou subway production order from China North Car Corp.'s Tang Motors Co., Ltd., and provided them with aluminum alloy body parts and other products.

Industry sources stated that Zhongwang Group has clearly made full preparations for seizing the high-end aluminum processing market and seeking the long-term development of the company. According to China Zhongwang's third-quarter earnings report for 2014, the company's intra-year revenue increased by 12.6% year-on-year to approximately RMB 12.31 billion; sales of aluminum extrusion products rose 15.9% year-on-year to approximately 574,000 tons. Sales of industrial aluminum extrusion products Revenue increased by 11.3% year-on-year to approximately RMB 10.16 billion; sales of deep-processed products increased by 22.7% from the same period of last year to approximately RMB 1.38 billion. The Group's deep-processed products were mainly sold to overseas markets, driving overseas income based on the US market. Significant increase of 29.8% to approximately RMB1.7 billion.

It is reported that currently, Zhongwang Group has 93 aluminum extrusion production lines, among which, there are 21 large-tonnage aluminum extrusion presses with 75MN and above, including four 125MN extrusion presses, and the annual production capacity exceeds 1 million tons, and the production capacity ranks The forefront of the global aluminum processing industry. Zhongwang also ordered two 225 MN single-action horizontal aluminum extruders, which are currently the world's largest tonnage, and is expected to start production as planned from 2015. Newly-acquired production equipment can better meet downstream customers' needs for complex, large cross-section industries. Aluminum product requirements.

With the deep processing center officially put into operation in 2013, Zhongwang Group has successfully developed highly-valued deep-processed products such as aluminum fire trucks, garbage trucks, semi-trailer trucks, tank trucks, rail vehicle bodies, etc., which has attracted the attention of the market.

Zhongwang's high-end aluminum rolling material production base is located in Tianjin Wuqing Auto Parts Industrial Park. As the Group is advancing the plant construction and equipment installation of high-end aluminum-rolled materials projects, the aluminum rolling machine imported from Germany, the United States and other countries has been delivered and installed in batches since 2014. The first phase of the project is planned to be put into operation one after another in 2015 with an annual production capacity of 1.8 million tons and by 2018 it will reach the planned total annual capacity of 3 million tons. Shortly afterwards, it will become the world's most advanced aluminum equipment manufacturing facility with the most complete supporting facilities. It can be used in a wide range of industries including aerospace, rail transit, automobiles, food and pharmaceutical packaging, chemical containers, and engineering equipment. Provide high value-added aluminum, aluminum and aluminum foil products.

Mr. Lu Changqing, Executive Director and Vice President of China Zhongwang stated: “In the process of national policy promotion and the transportation industry towards energy conservation, environmental protection and lightweight development, along with the further development of aluminum alloy and aluminum processing technology, aluminum is used in transportation. Downstream applications such as transportation, machinery and equipment, and power engineering are becoming more and more popular and have a huge market potential. Aluminum alloy products, as the preferred materials, will play an increasingly important role in improving fuel economy, reducing greenhouse gas emissions, reducing transportation costs, and improving transportation efficiency. The important role of China Zhongwang is that we are confident that with the top production equipment and years of experience in the development of aluminum extrusion products, we will seize the opportunities for development and meet the unknown challenges."