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While the growth rate of China's secondary aluminium sector has slowed in recentyears, the country has already built a formidable industry with an output of 6 million tonnes lastyear. Liu Wei outlines its structure and trends
Over the past five years, the rate of growth in output of secondary aluminium in China has slowed, owing to a global economic downturn and relatively slack demand. From a peak year-onyear growth rate of 30% in 2010, it fell to about 7.5% in 2 015 (see graph). Nevertheless, China's output of second ary aluminium reached 6 million tonnes lastyear.
China's secondary aluminium industry comprises five geographical clusters (see table). At a company level, China has five groups with a capacity exceeding 300,000 tpy each and more than 2 0 companies with a capacity of more than 100,000 tpy. Yechiu Group is the first recycled aluminium company to have been listed on the main board of Shanghai's stock exchange.
The sector has seen some rapid upgrades in equipment and technology. For example, in some instances manual batch sorting has been replaced by continuous, and sometimes automated, separation via conveyor belt. Modern furnaces with efficient extraction systems to reduce emissions have also been introduced by some secondary smelters.
Government policies
From 1st July last year, recycled aluminium (Le. secondary smelting) companies received a 30% VAT rebate if more than 7 0% of their raw materials for production came from end-of-life vehicles (ELVs), used wire and cable, beverage cans, waste electrical and electronic equipment (WEEE) or other 'post-consumer' scrap. This was the first time that preferential VAT policies have been applied to aluminium recycling companies and was expected to improve the profit margin of the companies benefiting by at least two percentage points.
The government has also toughened emission standards to reduce pollutants emanating from the secondary aluminium, copper, lead and zinc industries. The new standards (GB 31574-2 015) were approved in April lastyear. They applied to new plants from 1st July 2015, but existing installations have until 1st January 2 017 to comply.
Cost for upgrading
China Non-ferrous Metals Industry Association Recycling Metal Branch (CMRA) believes that some companies will struggle to meet the new standards, particularly for dioxin, fluoride and particulate emissions. The association estimates that it...