Primary aluminum production likely restricted by prebaked anode in near future

Asian Metal: Dear Mr. Men, thanks for accepting the interview with Asian Metal. Would you like to give a brief introduction of your company and the main business firstly?

Men: Jining Carbon is located in Jining, Shandong, the hometown of Confucius and Mencius, and was founded in 1987. We are a producer of anode with an annual capacity of 500,000t of prebaked anode and export about 210,000t of the material every year. Jining Carbon has been committed to the research and development of low carbon anode and aims to create value for our customers by strengthening technology and service as well as adding new functions. We produce low-consumption anode and high-power anode which are highly praised and sold well worldwide and have won the trust of our customers.

Asian Metal: According to Plan on Prevention and Control of Air Pollution in Beijing, Tianjin, Hebei and Surrounding Area for 2017, carbon enterprises of which the emission exceeds limitation in heating season will be restricted by 50% in terms of production. What’s your opinion on the implementation of the policy and what impacts do you think will it have on carbon industry?

Men: Well, it’s hard to say now as everyone is holding a wait-and-see attitude. But carbon industry will see a restricted production if severe fog and haze weather occurs during heating season even without issuance of such government document. I find it bit vague about the statement that carbon enterprises of which the emission exceeds limitation during heating season will be restricted by 50% in terms of production, and it is for the government to determine whether or not to restrict 50% of the production. However, it is certain that carbon industry will be affected to some extent.

Asian Metal: What’s your opinion on prebaked anode likely becoming a main factor to restrict primary aluminum production in the near future?

Men: Prebaked anode may restrict primary aluminum production in the short term. China is now under increasing pressures from environmental protection and carbon industry is severely affected with a majority of anode producers likely to restrict or suspend production, which will certainly affect the total anode output. However, production of primary aluminum hasn’t seen any influence from environmental protection or related policies, and the output of the material shows no significant decline; consumption for anode is relatively stable but with supply being tightened in the market now, so some aluminum plants plan to resume production which was delayed due to difficulties in purchasing anode. In view of the current development trend, I believe that prebaked anode may restrict primary aluminum production in the short term.

However, Chinese government has already introduced several policies for cutting primary aluminum capacity, which will affect some illegal constructions or activities in later period. So in the long run, output of anode and primary aluminum will reach balance generally.

Asian Metal: How does Jining Carbon cope with the stricter environmental protection requirement now?

Men: We spend a huge amount of money for installing environmental protection equipment, and aim to reach national emission standard by upgrading and replacing the equipment. This requires enterprises to constantly make upgrading for equipment in order to adapt policy changes.

Asian Metal: Anode prices have been rising continuously since early 2017, so what’s your opinion on the prospective market?

Men: It is hard to predict for the long-term trend, but I’m certain that prices for anode will keep rising before the fourth quarter at least. Prices are mainly affected by supply-demand relationship, and as mentioned above, supply for anode tightens in Chinese market now with downstream customers purchasing anode with a stable amount in order to maintain production of primary aluminum. Besides, customers take the initiative to raise anode prices and increase purchase volume for meeting production needs, as well as get ready for making replenishment during the heating season.

Asian Metal: Thanks again for your time and support for Asian Metal. Wish you every success in your business.