Galvanised Aluminium and Magnesium Price Differentials and Market Profitability Scope

As of December 7, Mysteel published data show that the mainstream specification of 2.0mm Angang zinc aluminum magnesium coil in Shanghai market is priced at RMB 5,500/tonne, while the price of mainstream galvanised products 1.0mm Angang galvanised coil is RMB 4,700/tonne in the same period, and the price difference between the two has reached RMB 800/tonne. According to the steel mills zinc layer and specifications of the markup rules, zinc-aluminium-magnesium coil zinc layer content of 275g, the corresponding steel mills zinc layer markup of about 300 yuan / ton. From this projection, even the same zinc layer thickness of the product, zinc aluminium magnesium prices are significantly higher than galvanised coil, which further confirms that from the perspective of traders and steel mills, zinc aluminium magnesium products are still maintaining a certain profitability space. It is worth noting that, in July, zinc aluminum magnesium and galvanised coil price difference was once expanded to 1,350 yuan / ton, but then basically stable at 1,000 yuan / tonne or less, which reflects the zinc aluminium magnesium market is currently also facing certain competitive pressures. A vivid example of this is the spread between zinc, aluminium and magnesium and zinc plating in Tianjin, as shown in Figure 2.

In the photovoltaic consumer market, in addition to East China, the Tianjin market also occupies an important position, especially Daqiuzhuang area, as a concentrated source of photovoltaic mounts, attracting the attention of many steel mills. At present, there are abundant resources of steel mills circulating in Tianjin market, including state-run steel mills such as Shougang, Anshan Steel, Tangshan Steel and Handan Steel, as well as private steel mills such as Hebei Zhaojian, Tianjin Xinyu and Shandong Huafeng. It is worth noting that the price difference between zinc aluminium magnesium and zinc plating in Tianjin is somewhat lower compared to the Shanghai market, reflecting the fact that in the competitive market, each steel mill has developed different strategies according to its own situation.

In addition, with the continuous development of new energy and carbon reduction environment, the photovoltaic industry has shown a vigorous momentum of development. According to a report by the National Passenger Vehicle Market Information Coalition, China's new energy vehicle market continues to prosper, with a significant year-on-year increase in production from January to October, and a cumulative penetration rate of 24.7%, contributing significantly to the growth of the automotive market. Meanwhile, the zinc, aluminium and magnesium industry is also facing a stage of growth opportunities under the policy support of the state to promote new infrastructure and new energy consumption.

China's photovoltaic industry has reached the international level in a number of aspects, especially under the pressure of the epidemic and economic downturn, but still able to maintain a stable development trend.2022 In the first three quarters of the year, China's photovoltaic industry chain in all segments of the production of a new record high, the industry's technology continues to innovate, and the conversion efficiency of the silicon heterojunction solar cells is a new record in the world. In addition, ‘photovoltaic +’ model is also expanding, bringing the industry a broader space for development.

In the coated industry's overall production capacity of the background of rapid growth, although the market sales channels and share is still broadening, but the competition between the industry is also increasingly fierce. To a certain extent, there is substitutability between coated sheet and coil varieties, which requires enterprises not only to focus on improving product quality, but also to continue to innovate in order to adapt to market changes and demands.

In the field of zinc-aluminium-magnesium product industry, a unified product standard has not yet been established, which to a certain extent restricts the healthy development of the industry. In order to promote the research and development and production of new zinc, aluminium and magnesium products towards standardisation, CMT Saidi Professor Xu Xiufei and other famous experts, under the support of the National Steel Standard Committee, have joined hands with national coating and plating enterprises to revise the industry standard of ‘Continuous Hot-Coated Steel Sheet and Strips for Construction’. This standard globally incorporates all plating components, including the three major types of zinc, aluminium and magnesium, to provide a convenient way for purchasers to cross-reference the use of, but also to promote the reasonable selection of plating products and better prices.

With the continuous improvement of the competitiveness of zinc-aluminium-magnesium products of domestic enterprises, this product has gradually reversed the previous situation of mainly relying on imports, and a large number of products have begun to be exported to foreign markets, even including Europe and the United States and other advanced countries. However, due to the lack of international standards, zinc, aluminium, magnesium and steel products import and export trade is still facing a lot of obstacles, the industry's technical barriers are also formed accordingly. Therefore, strive for international discourse, promote the development of international standards has become an important task for Chinese products to the world. Looking ahead, zinc, aluminium and magnesium plate international standard project is expected to promote China's coated plate enterprises in the international arena of competition to bring a new turnaround.

Coated sheet and coil industry is currently facing pressure can not be ignored. The problem of overcapacity is still prominent, the price level continues to be low, while domestic home appliances, automobiles and other industrial manufacturing areas of the slowdown also makes the incremental demand becomes difficult. In addition, the declining profitability of the sheet metal industry, including coated products, as well as internal structural adjustments, have further intensified the reshuffling of the industry.

However, zinc-coated aluminium-magnesium products still maintain a high technological threshold in the domestic and international markets by virtue of their unique performance and application characteristics. The demand for galvanised aluminium-magnesium products in engineering and downstream consumption industries continues to grow, and application areas are expanding, all of which bode well for the future development of the product. For those who can successfully join the white list of purchasing enterprises, they will gain a unique competitive advantage in the fierce market competition.

At present, competition in the low-aluminium zinc-aluminium-magnesium market is becoming increasingly fierce, and more and more enterprises are getting involved in the production and sale of zinc-aluminium-magnesium products, with a view to sharing the prosperity of this market. Looking ahead, it is suggested that the positioning of zinc-aluminium-magnesium products should focus on the direction of (medium) high aluminium zinc-aluminium-magnesium, in order to make full use of the industry's bright market prospects and lucrative profit margins.