The Next Profit Margin in The Alumina Industry-Red Mud
In the absence of new countries that can replace the decrease in aluminum demand caused by China's slowdown, the alumina sector is expected to enjoy a period of high profitability.
Only the complete utilization of the red mud (also known as "the worldwide problem"), which is known to be the next big profit, can set off the banner for the next profits.
The first thing you need to know about red mud
Alumina produces approximately 1.5 tons of red clay, which has a particle size of 0.088-0.25mm, a specific weight of 2.7-2.9 and a bulk density 0.8-1.0. It also has a melting temperature between 1200-1250°C. Below is a table that shows the composition of red clay:
The Bayer method is used to produce the majority of alumina in China. The Bayer Method is characterized with high levels of iron, aluminium and alkali.
Second, a typical case of alumina companies in the full utilization of red clay
1. Chinalco Shandong Branch. The data available shows that in 2016, the red mud utilization rate was 25 percent. China's enterprises that produce alumina have a high utilization rate, with accumulated consumption exceeding 12 million red clay. Henan Aluminium Industry Transformation and Growth Action Plan (2018-2010) clearly states that the comprehensive usage rate of red clay will reach 10% by 2020. No harm will come if there is no comparison. China's comprehensive utilization rate is too low. The main uses of mountain aluminum red clay are the development of new coal-burning de-sulfurizer technologies, high-grade concrete, highway subgrades and brick making.
2. Weiqiao Group, 2018: 20,000 tons of red dirt were used to cover the 5.3 km roadbed in the Binzhou segment of Jiqing's expressway. Estimates state that each kilometer of expressway consumes 200,000 tons, while provincial highways consume 60,000 tonnes, and municipal road can consume as much as 20,000 tonnes. Future market opportunities are wide for countries in China that have a lot of highway mileage.
Third, a typical example of social forces in the broad use of red clay
Shandong Satellite TV broadcasted a story on December 31st, 2018 about Zibo Tianzhirun Ecological Technology Co. Ltd. using large amounts of red dirt to produce permeable blocks (consumption 70,000 tons per year). The company's red-mud permeable mud brick project was chosen as one of Shandong Province's top ten innovations for the circular economy in 2018. The boss of the firm invested more than $30 million. After Zui, only two houses were also studed.
This is not only reminiscent that enterprises in Inner Mongolia have spent hundreds of billions of dollars trying to crack the code on the production of alumina from fly ash and yet there hasn't been a breakthrough.
Fourth, comprehensive red mud usage recommendations
Red mud has been used for a longer time in the production and use of roadbeds. Each has its advantages and disadvantages. There is a nearby plant that produces cement, and roadbeds are consumed in large quantities. The future demand for permeable blocks is low in economically developed areas. Therefore, it's possible to promote the production of these bricks nationwide. The only disadvantage is the fact that it is more cost-effective to sell bricks within a radius of 800 kilometers.
China's red mud alumina is generally used at a very low rate. Our utilization rate may not be as low as that of other countries, but we cannot compare ourselves to foreign countries. China's alumina has entered a new era, one of self-transcendence. We are now maximizing the utilization of red clay. The company's alumina position will be reshaped by the profit margin.
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