Zhongfu Industry: Transformation deep processing, aluminum price rise performance elasticity

Zhongfu Industry Co., Ltd. mainly produces electrolytic aluminum and deep-processed products, and its performance in the first quarter of 2016 increased significantly. The company's total aluminum electrolytic aluminum production capacity is 750,000 tons, the company's headquarters has a production capacity of 500,000 tons, and its subsidiary Linfeng Aluminum (70% share) has a production capacity of 250,000 tons. In 2015, the total output of aluminum products of the company was 692,000 tons, of which output of electrolytic aluminum was 272,700 tons and aluminum processing products were 419,300 tons. According to the 2015 annual report, the company achieved operating revenue of 9.712 billion yuan, up 0.4% year-on-year, and net profit attributable to the mother was -436 million yuan, compared with 42.66 million yuan in the same period last year. Benefited from the rise in aluminum prices, the company reported a substantial increase in its first quarter 2016 results, gross profit margin reached 11.12%, up 4.84 percentage points over the same period last year, operating income of 3.227 billion yuan, up 59.81% year-on-year; home net profit of 113 million yuan, last year During the same period -44.10 million yuan. The company has now formed an integrated industrial chain of deep processing of coal, electricity, aluminum and aluminum, which can further strengthen its cost advantage and enhance its core competitiveness.

The effect of contraction on the supply side of the electrolytic aluminum industry is significant, and there is a structural shortage of mismatch between supply and demand. The electrolytic aluminum industry has serious overcapacity and prices continue to decline. In 2015, the lowest level fell to 9,700 yuan/ton, which is almost at a loss level in the entire industry. By the end of 2015, China has achieved electrolytic aluminum production capacity of 36.5 million tons (a total capacity of 38 million tons, affected by the industry downturn, shutting down production capacity of 4.91 million tons, and a new production capacity of approximately 3.5 million tons). On the supply side, based on the operating rate of 85% in the first quarter of 2016, the total operating capacity was approximately 30.7 million tons. Demand-side, in 2015, domestic demand for electrolytic aluminum is about 30 million tons, which is in line with the demand growth of 5.2%. The total demand is expected to reach 32 million tons this year, and there is a phased gap between supply and demand. From the point of view of production capacity and new production capacity, the total capacity for resumption of production and new construction in the first quarter was about 1 million tons. In the short term, the resumption of production is less than expected, supporting the continued rebound in the price of electrolytic aluminum. We expect that the progress of production of electrolytic aluminum in the second quarter will continue to be slow and prices will remain firm. After the third quarter, as the price rises, most of the suspended production enterprises will return to the breakeven point. The increase in production capacity for resumption of production, coupled with the release of newly-built production capacity in the second half of the year, may lead to excess supply, and the price will be adjusted downwards. The specific conditions need to continue. Follow up on the production of electrolytic aluminum.

The company has its own power plant, the cost per ton of aluminum is at a relatively low level in the industry, and the aluminum price performance is highly elastic. The subsidiary Zhongfu Electric Power Co., Ltd. has a power generation unit of 3*300MW with an annual output of 7 billion kWh. The company's headquarters electrolytic aluminum power consumption of about 6.3 billion degrees, can be fully covered by the captive power plant, while there are 700 million kWh of electricity balance. The company's own cost of electricity is 0.2 yuan, and the net fee is 0.04 yuan (the net fee has dropped from 0.08 yuan in 2015 to 0.04 yuan), a total of 0.24 yuan/degree, and the cost of aluminum electricity is about 3,200 yuan. The total cost of aluminum electrolytic production at the headquarters About 10050. Linfeng Aluminum uses direct power supply, the price of electricity drops from 0.39 yuan to 0.34 yuan/degree, and the full cost of electrolytic aluminum is about 11,000 yuan. It is expected that the price of electrolytic aluminum will remain firm in the first half of the year. In the second half of the year, as the price increase brings about an increase in production capacity and new production capacity, the price will fall. It is expected that the average annual average price of electrolytic aluminum will be about 125,000 yuan, which will bring a profit of 1.26 billion yuan to the company. Thickening.

The company has undergone transformation and downstream deep processing. The project has been put into production and it is expected to turn a profit this year. The company's development strategy focuses on the layout of the aluminum downstream processing industry. The project of “Annually Producing 130,000 Tons of High-precision Aluminum Strip Cold Rolling Project” and “an annual output of 50,000 tons of high-performance special alloy aluminum” commenced production in the second half of 2015. The company's high-end aluminum alloy products are mainly used in aerospace and aviation, petrochemical, and In the areas of transportation and food cans, this year's production capacity will be further released, and it is expected to achieve profitability. The original processing cost of the company's original 400,000 tons of aluminum alloy products is about 4-500 yuan/ton (product price - electrolytic aluminum price). The processing capacity of deep processing products has not yet been fully released, and the processing fee is about 3,000 yuan/ton. With the gradual release of the production capacity of deep processing products, the processing fee is expected to reach 5-6000 yuan/ton, and the company's profitability will be further enhanced.

The company plans to increase IDC business transformation, electricity has significant advantages. The company plans to raise funds raised by 4.5 billion, of which 1.9 billion for IDC project construction. The fixed price increase was cut twice in a row, and the demand for restructuring was strong. The current fixed price increase was set at 5.69 yuan/share. The company's transformation IDC room has the following advantages: 1. Power cost advantage, IDC room maximum cost for power consumption, power consumption of about 1 billion degrees, accounting for 50% of the total cost, the company-owned power plant power generation balance of about 700 million degrees, can be greatly reduced Electricity costs. 2, the advantages of fixed assets, the company has idle plant, hydraulic and power facilities complete, can be used for IDC engine room construction. 3, geographical advantages. The IDC field in the central region is currently blank, but the central region is the key region of the Internet from north to south.

The electrolytic aluminum power cost advantage of the company is significant. The total capacity of electrolytic aluminum is 750,000 tons. The aluminum price rises, and the company's performance rises more. The aluminum price increases by RMB 1,000 each, which will bring about a net profit of about RMB 700 million. At present, there is a structural supply and demand gap in the electrolytic aluminum industry. After the third quarter, attention was paid to the situation of the electrolytic aluminum company's resumption of production. The annual aluminum price is expected to be 1.25 million yuan/ton. It is estimated that the net profit of the company in 2016 and 2017 will be 570 million yuan and 920 million yuan respectively.

Risk Warning: The progress of electrolytic aluminum production resumed ahead of schedule, and the company's deep-processing project capacity release was less than expected.

Potassium Chloride, Magnesium Chloride, Calcium Chloride are normally used in food additives, low-sodium salts as stabilizer, nutrition supplement, salt substitute, gelling agent, yeast food, condiment, pH regulator, tissue softening agnet etc.

The Chloride ion /ˈklɔːraɪd/ is the anion (negatively charged ion) Cl−. It is formed when the element chlorine (a halogen) gains an electron or when a compound such as hydrogen chloride is dissolved in water or other polar solvents. Chloride salts such as sodium chloride are often very soluble in water.[4] It is an essential electrolyte located in all body fluids responsible for maintaining acid/base balance, transmitting nerve impulses and regulating fluid in and out of cells. Less frequently, the word chloride may also form part of the "common" name of chemical compounds in which one or more chlorine atoms are covalently bonded. For example, methyl chloride, with the standard name chloromethane (see IUPAC books) is an organic compound with a covalent C−Cl bond in which the chlorine is not an anion.
A chloride ion is much larger than a chlorine atom, 167 and 99 pm, respectively. The ion is colorless and diamagnetic. In aqueous solution, it is highly soluble in most cases; 
Sea water contains 1.94% chloride. Some chloride-containing minerals include the chlorides of sodium (halite or NaCl), potassium (sylvite or KCl ), and magnesium (bischofite), hydrated MgCl2. The concentration of chloride in the blood is called serum chloride, and this concentration is regulated by the kidneys. A chloride ion is a structural component of some proteins, e.g., it is present in the amylase enzyme.
Role in commerce.
The chlor-alkali industry is a major consumer of the world's energy budget. This process converts sodium chloride or Potassium chloride into chlorine and sodium hydroxide or Potassium hydroxide, which are used to make many other materials and chemicals. 
Water quality and processing:
Another major application involving chloride is desalination, which involves the energy intensive removal of chloride salts to give potable water. In the petroleum industry, the chlorides are a closely monitored constituent of the mud system. An increase of the chlorides in the mud system may be an indication of drilling into a high-pressure saltwater formation. Its increase can also indicate the poor quality of a target sand.
Chloride is also a useful and reliable chemical indicator of river / groundwater fecal contamination, as chloride is a non-reactive solute and ubiquitous to sewage & potable water. Many water regulating companies around the world utilize chloride to check the contamination levels of the rivers and potable water sources.
An example is Potassium chloride, which is Potassium chloride with the chemical formula KCl. In water, it dissociates into K+ and Cl− ions. Salts such as calcium chloride, magnesium chloride, potassium chloride have varied uses ranging from medical treatments, food additive to industrial applications.
Calcium chloride (CaCl2) is a salt that is marketed in pellet form for removing dampness from rooms. Calcium chloride is also used for maintaining unpaved roads and for fortifying roadbases for new construction. In addition, calcium chloride is widely used as a de-icer, since it is effective in lowering the melting point when applied to ice.

Chloride

Calcium Chloride Flakes,Calcium Chloride,Magnesium Chloride,Potassium Chloride

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