Executive Interviews

Asian Metal: First of all, thank you, Mr. Yang, for joining us for this interview. Could you please give us a brief introduction to your company?

Mr. Yang: We are currently focused on the recycling and comprehensive utilization of scrap aluminum. Our facilities include six 40-ton melting furnaces, one 50-ton double-chamber aluminum melting furnace, and seven fully automated aluminum ingot casting lines. With an annual capacity of 100,000 tons, our actual monthly output ranges between 8,000 and 9,000 tons. Our product range includes aluminum alloy ingots, aluminum alloy sheets and strips, cold-rolled aluminum coils, cylindrical ingots, flat ingots, and castings. We adopt a B2B model to directly supply aluminum products to industries such as general machinery and automobiles. By offering customized production, bulk procurement, and technical support, we efficiently meet customer demands, optimize supply chain management, reduce transaction costs, and enhance market competitiveness.

Asian Metal: What types of recycled aluminum alloy ingots do you mainly produce, and what are their advantages?

Mr. Yang: The main aluminum alloy ingot grades we produce include ADC1, ADC12, A380, A383, A356, A360, ZL102, YL102, AlSi8, and AlSi10Mg, covering a wide range of domestic and international die-casting aluminum alloy specifications. We also support customized element composition based on client needs.

Upholding the philosophy of delivering superior quality to create value for die-casting customers, we supply high-quality ingot materials for applications in auto parts, motorcycle parts, 5G communications, lighting, and more. Our advantages lie, first, in our geographical location. Situated in Central China and close to Guangdong—the major consumption hub for aluminum alloys—our logistics costs are low, giving us a price advantage. Second, we utilize world-class production equipment and implement refined management in every process including melting, incoming material inspection, degassing, dross removal, and casting. This ensures excellent product consistency and stability, with all processes carried out in strict accordance with the highest industry standards.

Asian Metal: Traditionally, engine and gearbox housings in fuel vehicles are made from recycled aluminum alloys. As new energy vehicles (NEVs) lack these components, how is the rise of NEVs impacting mainstream recycled aluminum alloys?

Mr. Yang: Although NEVs are rapidly gaining market share—in fact, over half of all new cars sold in December last year were NEVs—the majority are still extended-range and plug-in hybrid models. For example, out of the 4 million NEVs sold by BYD last year, over 3 million were either extended-range or plug-in hybrids, both of which still require engines and gearboxes. In 2024, demand for recycled aluminum alloys has grown by approximately 8% year-on-year. Therefore, mainstream die-casting alloy grades like ADC12 have not yet lost their dominant position. Moreover, with growing advocacy for green and circular economies, the proportion of recycled aluminum usage will continue to rise. Structural parts in NEVs will also gradually shift toward recycled aluminum alloys.

Asian Metal: Given the trend toward light weighting, NEVs use more aluminum than fuel vehicles. How do you view the future demand for aluminum alloys in the NEV sector? Is your company developing related products?

Mr. Yang: It’s clear that aluminum consumption per NEV is increasing. Currently, NEV subframes, battery housings, crash beams, and some structural parts are all produced with aluminum alloys. While fuel vehicles used to consume about 250kg of aluminum per unit, NEVs now consume between 300-400kg. With the advancement of integrated die-casting technology, this figure may exceed 600kg per vehicle. We are already working with companies like BYD to develop specialized aluminum alloy products for NEVs, including new materials with excellent properties such as heat-treatment-free performance and high thermal conductivity.

Asian Metal: The recycled aluminum alloy ingot market was strong in Q4 last year, but downstream orders dropped sharply in Q1 this year. What caused this shift?

Mr. Yang: The auto industry is the primary consumer of recycled aluminum alloy. Q4 is the peak season for auto sales, and many automakers rush to meet year-end targets, driving demand for aluminum alloy ingots. In contrast, Q1 saw a sharp decline due to two main reasons. First, the March–May period is traditionally a slow season for the automotive industry, causing a natural drop in demand. Second, changes in international trade policies led to a decline in auto parts export orders. For example, in March, one of our downstream customers reported operating at only about 70% of normal capacity.

Asian Metal: Do you expect demand to recover in Q2? What is your current assessment of downstream customer orders?

Mr. Yang: I believe demand will rebound in Q2. The Chinese New Year holiday had a significant impact on Q1 demand. As we move into May, the auto industry’s low season will end and sales are expected to rise, which should boost demand for recycled aluminum alloy ingots. As of late March, although April orders hadn’t shown significant improvement, we remain optimistic about Q2 consumption. The biggest uncertainty remains the trade policy between China and the U.S. Although implementation was delayed by 90 days, there is still a possibility of further changes. These could affect our exports to U.S. allies, potentially softening demand for recycled aluminum alloy ingots.

Asian Metal: Domestic scrap aluminum supply has remained tight over the past two years. How long do you expect this situation to last?

Mr. Yang: The tight supply of scrap aluminum may ease somewhat with increased imports. However, over the long term, the expansion of recycled aluminum alloy production capacity is outpacing the growth of domestic scrap aluminum supply. So, we anticipate that the shortage of domestic scrap aluminum will likely persist for the next two to three years.

Asian Metal: What is your company's future development direction? Are there any new projects in the pipeline?

Mr. Yang: Our future development will focus on consolidating our aluminum alloy ingot business while expanding into wrought aluminum alloys, flat ingots, and aluminum sheet and strip. We aim to diversify our product line, with over 60% of future profits expected to come from wrought aluminum alloys. Meanwhile, we are also expanding into automotive parts production. Currently, we are executing a new project with a total investment of RMB 500 million, divided into two phases. The first phase include the construction of a 30,000-ton aluminum coil processing line, a 70,000-ton aluminum rod processing line, and a highly automated, intelligent "smart die-casting island" for producing one million NEV castings per year; Phase Two include the construction of a 40,000-ton aluminum coil processing line and a 70,000-ton flat ingot processing line. Once Phase one is operational, it is expected to generate annual output value of over RMB 600 million and contribute more than RMB 30 million in tax revenue. Phase two is projected to generate annual output value of over RMB 1.2 billion and tax revenue exceeding RMB 60 million. Currently, six production lines are under construction for different product categories, including castings, aluminum sheet and strip, cold-rolled aluminum coils, aluminum rods, and flat ingots. The project has entered the equipment installation and commissioning stage and is expected to begin phased production in April 2025.

Asian Metal: Thank you for your wonderful sharing Mr. Yang. We wish Yongzhou Zhongxin Aluminum Co., Ltd. continued success and breakthrough achievements in product innovation!

Mr. Yang: Thank you.