Aluminum foil is developed to a lot as a high-production commodity. Aluminum foil has a number of characteristics that makes it suitable for various applications, including packaging, cooking, smoking, and personal use, and household use. It is commonly used in many of these types of packaging and a number of other applications, including construction insulation, cars, aircraft, and homes, as well as the numerous stationery trademarks and printed merchandise. Upstream to many of the other industries is the electrolytic aluminum sector. An electrolytic enterprise purchases the aluminum ingots for more manufacturing, creating aluminum tray, sheet, and foil. Packaging, heat exchange, power electronics, manufacturing, household foil, and batteries are a few of the downstream industries we provide for. Based on information released by the aluminum foil manufacturing group, packaging and HVAC foil represent 50% and 25% of total aluminum foil production/usage.
Our total 2019 intake of 2.75 million tons of aluminum would account for around 60% of global demand. However, the capacity usage rate of the aluminum foil industry would drop from 85% in 2006 to 66.7% in 2019 as the largest domestic manufacturers cut down on production. By and large, the industry\'s overcapacity is the most serious issue. Aluminum foil would not have a strong negotiating position in the supply chain. Often, an imbalance exists between high-end and low-end brands. Industry earnings are almost always derived from low-end goods and most of the companies focus on the lower end of the market. The needs of the consumer and the industry forces influence the development of the aluminum foil industry to rise to industrial standards.
The Idea Of Aluminum Industry
Due to low barriers to entry and preferential policies such as export tax rebates, many enterprises are constantly pouring into the aluminum foil industry, resulting in low market concentration and overcapacity. Although currently, only 10 companies have more than 100,000 tons of raw materials, including Dings\'Nongs materials have made their first appearance. Nonetheless, several of its downstream sectors are extensive, such as beef, pharmaceuticals, and the manufacturing of vehicles. The concentration of these domestic markets is very high, and the downstream industries often have a say in the negotiation. At present, the main market demand of the aluminum foil industry comes from air conditioning foil and packaging foil. Air conditioning foil refers to the aluminum foil used for air conditioning heat exchanger fins to improve the heat exchange efficiency of air conditioning, which can be divided into light foil and hydrophilic coated foil. Packaging foil is mainly used for the packaging of food, utensils, cigarette and so on. According to the thickness, it can be divided into single zero foil and double zero foil. The market demand for these two kinds of products is stable, which is the main business support for the long-term profits of enterprises. However, in recent years, the market has developed rapidly and the competition is becoming fierce. With the increase of the number of enterprises in the industry and the continuous expansion of production capacity, some leading enterprises began to upgrade their existing products and expand emerging markets. For example, hydrophilic coated air-conditioning foil becomes the mainstream raw material of air-conditioning heat exchanger instead of light foil, and food and drug packaging foil shows the trend of high-end.
At the same time, with the subsidies for new energy vehicles, the field of battery foil has gradually become an important business expansion point of aluminum foil industry. Lithium aluminum foil technology is difficult and has high added value, so its processing fee and gross profit rate are much higher than traditional aluminum foil. Battery companies, especially foreign-funded battery factories, have a longer certification period for battery aluminum foil, usually more than three years. However, once they enter the supply chain system of enterprises through certification, they often form a relatively stable cooperative relationship. Therefore, new entrants are faced with certification barriers, and it is difficult to shake the industry status of advantageous enterprises that have priority to enter the supply chain. Therefore, the market barriers are high and the competition pattern is good. At present, new material is the leading enterprise in the field of battery foil, and its capacity of battery foil will account for 49% in 2019. But in recent years, aluminum processing enterprises are also expanding production capacity, the future market competition pattern