member of CSC Group

C.S. Aluminium Corporation

Market OutlookofTaiwan's Aluminium Industries

AFLM 2012 , Japan
09/11/2012
S.H. Shih
Ningbo Huayang Aluminium-Tech Co., Ltd
C.S. Aluminium Corporation1

member of CSC Group

C.S. Aluminium Corporation

Ningbo Huayang Aluminium-Tech (NHAC)- the subsidiary of CSAC
Specialized in the aluminium rolled produccts of sheet/coilwith design annual capacity 35,000 metric tons

http://www.csalu.com.tw2

C.S. Aluminium Corporation

member of CSC Group

C.S. Aluminium Corporation (CSAC)
The Largest Producer of Aluminium Rolled Products in Taiwan
with design annual capacity 122,00 metric tons

http://www.csalu.com.tw3

member of CSC Group

C.S. Aluminium Corporation

Contents▓ Profile of Taiwan Aluminium Industries▓ Supply / Demand of Aluminium Market in Taiwan - 2011
▓ Import/Export of Taiwan Aluminium Market▓ Casting Industry▓ Extrusion / Forging Industries▓ Rolling Industry▓ Conclusion4

member of CSC Group

C.S. Aluminium Corporation

Contents▓ Profile of Taiwan Aluminium Industries▓ Supply / Demand of Aluminium Market in Taiwan - 2011
▓ Import/Export of Taiwan Aluminium Market▓ Casting Industry▓ Extrusion/Forging Industries▓ Rolling Industry▓ Conclusion
5

C.S. Aluminium Corporation

member of CSC Group▓ Profile of Taiwan Aluminium Industries● Production - by volume :819 thousand metric tons in 2011 for four main categories:
Secondary Aluminium Alloy, Casting, Rolling and Extrusion Industries

Thousandmetric tons
(kt)

6
Source: Industrial Production Statistics of Taiwan

C.S. Aluminium Corporation

member of CSC Group▓ Profile of Taiwan Aluminium Industries● Production - by value :84.2 billion NT$ (New Taiwan dollar) in 2011 for four main categories:
Secondary Aluminium Alloy, Casting, Rolling and Extrusion Industries

Billion NT$

7
Source: Industrial Production Statistics of Taiwan

member of CSC Group

C.S. Aluminium CorporationContents▓ Profile of Taiwan Aluminium Industries▓ Supply / Demand of Aluminium Market in Taiwan - 2011
▓ Import/Export of Taiwan Aluminium Market▓ Casting Industry▓ Extrusion/Forging Industries▓ Rolling Industry▓ Conclusion
8

C.S. Aluminium Corporation

member of CSC Group▓ Supply / Demand of Aluminium Market in Taiwan - 2011
Secondary Aluminium Alloy Ingot, Rolled Products and Extruded Products● By Volume● By Value

Source: Industrial Production Statistics/Customs import and export statistics of Taiwan
9member of CSC Group

C.S. Aluminium CorporationContents▓ Profile of Taiwan Aluminium Industries▓ Supply / Demand of Aluminium Market in Taiwan - 2011
▓ Import/Export of Taiwan Aluminium Market▓ Casting Industry▓ Extrusion/Forging Industries▓ Rolling Industry▓ Conclusion
10

C.S. Aluminium Corporation

member of CSC Group▓ Import/Export of Taiwan Aluminium Market● Import - Raw Material

Thousandmetric tons
(kt)

Aluminium Alloy Ingot : United Arab Emirates(38%), Australia(30%) and Russia(16%)
Aluminium Alloy Billet : United Arab Emirates(43%), Australia(23%) and Bahrain(19%)
Source: Customs import and export statistics of Taiwan

11C.S. Aluminium Corporation

member of CSC Group▓ Import/Export of Taiwan Aluminium Market● Import - Main Semi-Fabricated Products
Rolled Products and Extruded Products

Thousandmetric tons
(kt)

Source: Customs import and export statistics of Taiwan

There is still some room for Taiwan aluminium rolling industry to develop its own
12domestic market.

C.S. Aluminium Corporation

member of CSC Group▓ Import/Export of Taiwan Aluminium Market● Export - Raw Material

Thousandmetric tons
(kt)

Source: Customs import and export statistics of Taiwan

13

C.S. Aluminium Corporation

member of CSC Group▓ Import/Export of Taiwan Aluminium Market● Export - Main Semi-Fabricated Products
Rolled Products and Extruded Products

Thousandmetric tons
(kt)

14

member of CSC Group

C.S. Aluminium CorporationContents▓ Profile of Taiwan Aluminium Industries▓ Supply / Demand of Aluminium Market in Taiwan - 2011
▓ Import/Export of Taiwan Aluminium Market▓ Casting Industry▓ Extrusion/Forging Industries▓ Rolling Industry▓ Conclusion15

member of CSC Group

C.S. Aluminium Corporation▓ Casting Industry● Material Flow and Market
aluminium wheels - 55 kt
Aluminiumcasting
80 kt

Aluminium
alloy ingot
246 ktImport83 kt
Domestic
163 ktAluminium
die casting
140 ktAluminium
precisioncasting＜1 kt

Estimated by C.S. Aluminium Corporation

piston、auto/motorcycle parts、
machinery components/hardware-25 ktauto/motorcycle/bicycle parts
Machinery components,
hardware and 3C parts

Aerospace components
Golf club heads, hardware
16

member of CSC Group

C.S. Aluminium Corporation

Contents▓ Profile of Taiwan Aluminium Industries▓ Supply / Demand of Aluminium Market in Taiwan - 2011
▓ Import/Export of Taiwan Aluminium Market▓ Casting Industry▓ Extrusion / Forging Industries▓ Rolling Industry▓ Conclusion17

member of CSC Group

C.S. Aluminium Corporation▓ Extrusion / Forging Industries● Material Flow and Market in 2011
Aluminium
Extruded
Products~ 170 kt
Aluminium
Alloy Billet
365 ktDomestic
240 ktNet Import
125 ktAluminium
Extrusion Bar~ 105 kt

Aluminium
Forging~ 25 kt

Estimated by C.S. Aluminium Corporation

Industry extrusion ~140 kt
Window frames/curtain wall
~30 ktForging auto/motorcycle/bicycle
parts, machinery components
Export ~10 ktaluminium forging wheels-18 kt
Auto/motorcycle parts, aerospacecomponents
18C.S. Aluminium Corporation

member of CSC Group▓ Extrusion / Forging Industries● Market of Extruded Products◎ Current Status
Total annual production of extruded products was 170 thousand metrictons with about 15% for export in 2011.
Two major supplying sources of raw material :(a). Billet (mainly 6063 alloy) imported from Bahrain, Australia, United
Arab Emirates, South Africa and USA.
(b). There are about 16 billet producers in Taiwan who import primaryaluminium ingot and manufacture billets locally.
There are approximately 100 Aluminium extruders in Taiwan. Most ofthem produce 6XXX alloys for industry extrusion. Some of them produce
higher strength alloy like 2XXX, and 7XXX for sports goods, bicycle parts,machinery, aerospace components, etc.
The production of window frames and curtain walls now only accounts
for 17%.
19

C.S. Aluminium Corporation

member of CSC Group▓ Extrusion / Forging Industries● Market - High strength aluminium extrusion◎ Current Status
In recent years, the output of high strength aluminium alloy (2000and 7000 series) has accounted 18～20%, and enjoys steadygrowth.
Taiwanese businesses rank at top in the world in terms of thesupply for high strength extrusion products :★ Taiwan ranks No. 1 for Al-Sc alloy bicycle frames in the world.
★ Taiwan’s high strength aluminium alloy baseball bats rank
No.1 in the world in terms of market share (60-70%approximately ).
★ Bicycle frames (Al-Sc alloy), shock absorber tubes (7075-T6),
chainwheels (7075-T651) and cranks (7050-T6) are the major
products for bicycles.
20

C.S. Aluminium Corporationmember of CSC Group▓ Extrusion / Forging Industries● Market - High strength aluminium extrusion◎ Competitive Advantage and Prospect

With the advantage of reaching the same levels oftechnology and quality as the advanced suppliers
from Europe, the U.S.A. and Japan, Taiwan is morecompetitive and expected to play a very important rolein the supply for the high-strength aluminum extrusion
market in the world.
Taiwan’s high-end bicycle supply chain has been wellconstructed, with advantages in brand and distribution
channels.
21member of CSC GroupC.S. Aluminium CorporationContents▓ Profile of Taiwan Aluminium Industries▓ Supply / Demand of Aluminium Market in Taiwan - 2011
▓ Import/Export of Taiwan Aluminium Market▓ Casting Industry▓ Extrusion / Forging Industries▓ Rolling Industry▓ Conclusion
22

C.S. Aluminium Corporation

member of CSC Group▓ Aluminium Rolling Industry● Material Flow and Market in 2011

Unit: thousand metric tons

23member of CSC Group

C.S. Aluminium Corporation▓ Aluminium Rolling Industry● Domestic Demand for Rolled Products (by Sector) 2011

Can Sheetaccounts for near 80%
thousandmetric tons

share(%)

Packaging

5032%

Electronic, Electric, IT-related

4528%

Building / Construction

3220%

Machinery

106%

Transportation

53%

Others

1610%

Total

158

100%

Sectors

Estimated by C.S. Aluminium Corporation

24

C.S. Aluminium Corporation

member of CSC Group▓ Aluminium Rolling Industry● Main Market - Cans

◎ Demand for Aluminium Sheet for Cans in Taiwan

As for the main market for Taiwan Rolling Industry, Thebeverage can is the most important one.
The main market for the Taiwan aluminium rolling industry
remains the beverage can, despite strong competition fromsubstitution materials.
Aluminium sheet used for beverage cans still occupies a large
share of Taiwan’s rolled product market.
However, with the strong competition from PET and othersubstitution materials, the demand for aluminium sheet forbeverage cans is expected to remain at the current levels ofaround 40 thousand metric tons without further growth, andTaiwan's can-makers will transfer their focus to the market inChina.
25

C.S. Aluminium Corporation

member of CSC Group▓ Aluminium Rolling Industry● Main Market - Cans

◎ Booming Demand for Aluminium Sheet for Cans in China

Estimated by C.S. Aluminium Corporation

26

C.S. Aluminium Corporationmember of CSC Group▓ Aluminium Rolling Industry● Main Market - consuming electronic / IT related products
New consuming electronic and IT related Products Spur
Demand for Aluminium sheet
Today, the uses of aluminium in IT products shows strong
growth thanks to its superior characteristics.
Taiwan’s manufacturers of consumer electronics and IT-relatedproducts (including those from their production bases in China)
play a very important role in global supply.
Following the development of lifestyle trends, aluminium sheet
now is and will remain the important choice of material used for
those kind of products in the future.
The booming demand for aluminium sheet for IT products will
push the major Asian rolling mills to focus on this market of thefuture.
27

C.S. Aluminium Corporation

member of CSC Group▓ Aluminium Rolling Industry● Developing Market- Automotive body sheet

Trend of reduction of CO2 emissions is driving theincreased adoption of Aluminium globally.
Novelis, Inc. forecast:
Steel FRP (Flat Rolled Products) demand will significantly
increase despite material substitution.
Although AL-BiW (Body in White) will have a strong CAGR
2011-2025 of 15-20%, it will remain a small player incomparison to steel.
Speeding Ahead – Automotive Lightweighting
Erwin Mayr
Chief Strategy and Commercial Officer
Novelis, Inc. June 12, 2012
Chicago28

C.S. Aluminium Corporation

member of CSC Group▓ Aluminium Rolling Industry● Developing Market- Automotive body sheet

Trend of reduction of CO2 emissions is driving theincreased adoption of Aluminium globally.
Large long-term growth potential for aluminium
In 2011 the global consumption for aluminium bodysheet used for automotives was just around 300
thousand metric tons in terms of weight.
It is estimated to grow up to over one million metrictons in 2020 if using a 15% CAGR.
29

C.S. Aluminium Corporation

member of CSC Group▓ Aluminium Rolling Industry● Global Long-Term Trends in Aluminium Rolled Products
Global Demand for Aluminium Rolled Products (Plate,Sheet/Coil, Foil)

Megatrends● Demographic

millionmetrictons● Urbanization● Environment

20 million metric tons approximately in 2011
Expected to reach:
25 million metric tons in 2015
30 million metric tons in 202030

C.S. Aluminium Corporation

member of CSC Group▓ Aluminium Rolling Industry● Taiwan’s New Investment
As mentioned earlier there is still some room for the Taiwan
aluminium rolling industry to develop in the domestic market.
Also mainly with the prospect of high growth in demand foraluminium rolled products in the emerging market of China andSoutheast Asia, in 2011 C.S. Aluminium Corporation, the largest
aluminium rolling manufacturer in Taiwan, decided to carry out amajor expansion investment with advanced technologies andfacilities to increase the existing design capacity of 120 thousand
metric tons by 146 thousand metric tons to 266 thousand metrictons.
Construction work for the expansion is projected to be completed
by the end of 2013.
31

member of CSC Group

C.S. Aluminium CorporationContents▓ Profile of Taiwan Aluminium Industries▓ Supply / Demand of Aluminium Market in Taiwan - 2011
▓ Import/Export of Taiwan Aluminium Market▓ Casting Industry▓ Extrusion / Forging Industries▓ Rolling Industry▓ Conclusion
32

C.S. Aluminium Corporation

member of CSC Group▓ Conclusion
The competitive advantages of Taiwan’s aluminum industry are:1) excellent aluminium processing technology and high productgrade;2) advanced production and marketing information system andmanagement system;3) full supporting system with the peripheral industries, and4) high production flexibility, strong marketing ability and fastreaction.
However, facing the competitive environment of open markets, itwill become much harder for enterprise operation. The future market
strategy should strive towards the expansion of international
marketing. There have been huge growths in aluminum consumption
in China, India and other emerging markets in Southeast Asia. Suchvast potential markets are worthy of being explored aggressively bythe Taiwan aluminium industries.
33C.S. Aluminium Corporation

member of CSC Group▓ Conclusion

The low-end aluminium producers will no longer becompetitive. The future market opportunities for Taiwan’s
aluminium industry exist in the development of high-grade/highvalue-added niche products.
These high-grade/high value-added niche products will include:
automotive body sheet, anodizing aluminum sheet for
consumerelectronics/IT-related
products,
high-strength
aluminium plate and aluminium beverage can stocks for thealuminium rolling industry;●● high-strength/high-precisionindustrial extrusions for thealuminium extrusion industry; and● andaluminium forged security components for vehicles,
and forged/cast aerospace components for the aluminium
forging Industry .
34