The price of aluminum ingots anti-dumping aluminum wheels low gross margin encountered internal and external problems

Following the US Tire Special Protection Act, China's tire exports to the United States dropped by 20.1%. As the largest export product of China’s auto parts, auto aluminum alloy wheels are currently facing the European Union’s final ruling, and the final anti-dumping tax rate has increased from the preliminary cut of 20.6%. To 22.3%. Compared to Chinese aluminum wheel companies with a gross profit margin of less than 20%, under the background of weak bargaining power, reducing exports to the EU has become inevitable.

Fortunately, the rebound of auto markets such as the United States, Japan and South Korea and the rapid growth of China’s automobile market since last year have found a sales buffer zone for Chinese aluminum wheel enterprises with the EU as their main export destination, with the inflation lag not causing cost increases. , China's current decline in aluminum wheel business is not very clear. However, it should not be overlooked that the current rising cost of raw material aluminum ingots will likely start to show up next year, and important auto markets such as the United States may also follow the EU's anti-dumping measures. Analysts pointed out that if export-oriented aluminum wheel companies fail to reduce costs and increase efficiency in a timely manner, and increase their support for the domestic auto market, the future development will be greatly challenged.

Anti-dumping for double losses On November 9th, the China Association of Automobile Manufacturers stated once again that the European Union's final anti-dumping case on aluminum alloy wheels originating in China underscores the fact that it has undermined the good development trend of the Chinese and EU auto industries and will retain the WTO Rights of the trade dispute mechanism.

The European Commission’s anti-dumping of Chinese aluminum alloy wheels began on May 11 this year, when the EU initially imposed a temporary anti-dumping tariff of 20.6% on the products involved. On October 28th, the European Commission announced the final ruling on imported aluminum wheels originating in China and decided to impose an anti-dumping tax at a rate of 22.3%. The decision was implemented on October 29, 2010. In accordance with EU anti-dumping regulations, the final period of anti-dumping measures is five years.

For this anti-dumping final ruling, SAIC Assistant Secretary General Shi Jianhua did not agree. He said that in this case, China’s imports accounted for only 11% of the European Union’s market share. The EU only considers expectations for the future based on estimates and believes that China’s imported products will use price monopoly to increase prices after they have taken advantage of the market. Non-fact analysis.

Analysts pointed out that anti-dumping will create a double-loser situation: China's aluminum wheel industry will be hit hard, which in turn will cause European automakers to increase the cost of procurement, resulting in the increase in the cost of use of the EU consumers.

The benefits of manufacturing in China to consumers around the world are obvious to all. The global division of labor and cooperation are the trends. The automotive industry in the world is shifting to low-cost regions like China and then to the world through global procurement, so that consumers around the world can enjoy the benefits of globalization. Over the years, the European automotive companies have made remarkable achievements in their investment projects in China and have obtained substantial profits. At the same time, in order to meet the needs of the European OEMs, Chinese suppliers have made a lot of R&D investment in the early stage and the products have been widely recognized and used by Mercedes, BMW, Volkswagen, Audi and other companies. The current anti-dumping final ruling has made the efforts of some aluminum wheel suppliers in the early stage likely to go unresolved.

In fact, the European Automobile Industry Association and European automobile manufacturers are firmly opposed to imposing anti-dumping duties on aluminum wheels originating in China. Among them, the European Automobile Industry Association also applied for a separate hearing at the European Commission and pointed out that there is no evidence to prove that dumping of aluminum wheels exported to Europe in Europe has caused damage to EU-related industries, and stressed that anti-dumping measures are not in European interest. The major European automobile manufacturers groups have also expressed to their governments and relevant departments, in varying degrees, their stance of amicably negotiating and resolving cases.

According to the facts after the preliminary ruling, some of China’s aluminum wheel suppliers’ exports to the EU have fallen by more than 30%, and EU-related car companies have shared some of the anti-dumping tax rates, which has, to a certain extent, increased the number of EU-related automobile companies. The cost of production, thereby weakening the competitiveness of the United States, Japan and other car companies competing on the same platform.

According to professional sources, the current gross profit margin of the aluminum wheel industry in China is not high, generally less than 20%. For example, the gross margin of Wanfeng Aowei's coating wheel in the first half of this year was 16.95%, while the gross profit margin of electroplating wheels was 13.04% If the 22.3% anti-dumping tariff levied by the EU cannot be reasonably shared or passed on, the aluminum wheels exported to the EU will face losses until they are eliminated. Therefore, all related companies are basically exploring other international markets and increasing the supply of the Chinese market, and reducing costs through tapping their potential.

As the largest automobile alloy wheel manufacturer in China, CITIC Decker Wheels Manufacturing Co., Ltd. has an annual production capacity of nearly 20 million. It is the only aluminum alloy wheel hub company in the world that is also supporting the world’s top 12 multinational automobile company platforms. Including Audi, BMW, Mercedes-Benz and other EU high-end customers, it has also actively responded to the EU's anti-dumping. After the anti-dumping duty levying strategy, the company's deputy general manager Xiao Xiaojun said that since it takes 1-2 years for product development and quality certification for the EU mainframe plants, in the short term, these mainframe manufacturers cannot change the supply system, and the EU Aluminum wheel manufacturers do not have such a large supply of products in the short term, so the company’s sales decline is not obvious. Under normal circumstances, the anti-dumping tax rate levied by the EU mainframe factory.

Xiaojun Xiao further stated that EU market companies must not give up. Of course, the United States, Japan, South Korea, and the domestic market are also being explored. At present, the United States is already the company’s largest overseas market.

Like CITIC Dicastar, it is Wanfeng Aowei who does not abandon the EU market. An executive from the company stated that after the anti-dumping duties imposed on the European market, the impact was not expected to be large. At present, the production of aluminum wheels in developed countries is not competitive because of the high cost, and the transfer of supply systems to markets such as India and Vietnam requires the improvement of local supporting production and technical levels, which is difficult to accomplish in the short term. At the same time, the company continued to open up other international markets and increased the development of the domestic market. In recent years, the domestic auto market has developed rapidly. Some of the company's production capacity has been transferred to the domestic market. In the EU market and the domestic market, the share of the EU market has declined. In addition, the company also taps internal potential to reduce production costs and increase competitiveness.

The real test is that even though the supply system has not been transferred for the time being, the current domestic aluminum wheel export volume to the European Union will not drop very much. However, industry insiders worry that the lag effect of inflation will appear, and the price of aluminum wheels will be driven by the cost. It will rise. Under the background that the bargaining power is not as strong as the auto factory and anti-dumping tax is contained before, the aluminum wheel will face a real test, and if the United States and other anti-dumping measures are followed up, it will be worse.

At present, there are three listed companies engaged in automobile wheel hub production, namely Xingmin Steel Ring, Jingu and Wanfeng Aowei. The former two are mainly used for commercial vehicles, while Wanfeng Aowei is mainly engaged in The aluminum wheel is one of the objects of anti-dumping in the EU.

In June, Wanfeng Aowei predicted that the company's annual sales in Europe will decline by about 60% in 2010, and its overall business in Europe will decline by more than 80%. The company announced on September 30 that according to the company’s actual operations, the company has made timely corrections to the impact of previous disclosures. The company’s management has forecasted this year's profit, and it is expected that the company’s sales scale and profit in Europe will decline throughout the year in 2010. About 30% or so.

CITIC Dika related people also said that the current sales decline is not obvious.

In this regard, an automotive industry analyst said that the recovery of the European and American auto market and the rapid development of the Chinese auto market since the beginning of the year have found a buffer zone for the sales of aluminum wheels in the European market, especially in the Chinese market, which increased by 46% last year. Based on the above, the sales volume in the first ten months of this year exceeded that of the previous year, reaching 14.67 million units, an increase of 34.76% year-on-year, which has provided an opportunity for these companies to seek market growth.

However, the actual increase in the domestic market is not infinite, because many large car companies have their own supporting company, it is not easy to enter this system. Moreover, the current price of aluminum is rising. In order to curb the rise in aluminum prices, the State Reserve continued to sell aluminum ingots on the 16th.

This year, the aluminum used by aluminum wheel companies was signed at the beginning of this year. Now these companies are still in a happy period: the increase in product sales and the small change in cost. However, the lag in inflation will show up next year. If we do not develop the market in time, adjust the product structure, and effectively control the cost, the performance will be tested next year when the bargaining power is not strong.