Downward Price and Severe Overcapacity of Brown Fused Alumina

This week, the domestic brown fused alumina manufacturers expressed that the market mainstream price is lowered restricted by the market demand. Today, in Henan, the market price of brown fused alumina Al2O3≥95% dumping furnace section sand is about 4000-4300 RMB/ton, lowering 150-250 RMB/ton; The mainstream price of fixed furnace is about 3800-4150 RMB/ton, dropping 150-200 RMB/ton.

The overcapacity of brown fused alumina enterprises has been further obvious. We can learn from the survey that in recent years, some enterprises upgrade their smelting furnaces, and further improve the capacity. Although the market demand has slowed, the production is still keeping growing trend. Therefore, it causes the imbalance between product supply and demand, and serious excess capacity, so the market competition is increasingly fierce.

This week, we investigate national 31 production enterprises of brown fused alumina and learn about the actual production scale in the past two years. Actually, there are four enterprises whose actual output is more than 40000 tons every year, four enterprises with actual output about 30000 -40000 tons, and also four enterprises with actual production about 20000-30000 tons per year. There are 19 enterprises with actual annual output about 20000 tons. It is reported that large-scale manufacturing enterprises are less, and most brown fused alumina enterprises have actual production within 20000 tons. In recent years, because the domestic demand for brown fused alumina is limited, many enterprises begin to reduce capacity to reduce fund pressure, and the capacity release rate is low. According to statistics, in 2014, the annual output of brown fused alumina is about 1.55 million tons with year-on-year growth of 11.63%, and 3.33% growth from 2013. The productivity release rate has reached 35%. Severe overcapacity situation of brown fused alumina is more worrying.

Now brown fused alumina are mainly sold to domestic refractories and abrasive industries. According to statistics, the refractory material sales account for about 60-70%.The current downturn in the steel mills makes the terminal demand hard to boost. With some enterprises delivery pressure rising, the market trading becomes chaotic and most offers are uneven. More and more enterprises has moved or adjusted the production center of gravity, going into abrasives industry and injecting fresh blood for brown fused alumina, so the diversified development will be more obvious for brown fused alumina enterprise vitality in the future.