Category Archives: cathodes
For registered attendants of AZ China’s 4th International Aluminium and Carbon Conference, on the night of Tuesday, May 6, 2014 there is an option: to Gala, or not to Gala? That is the question.
But what is the measure of our decision?
If our minds long to be entertained, dulled by the weary excuses for conference entertainment we so often see – we say yes! Our pre-dinner traditional Chinese entertainers are as charismatic as they are alluring.
If our hearts yearn for delectable cuisine so scrumptious our watering mouths flood the lands – we say yes! Guests will dine at 7:30pm in picturesque Houhai, a reclusive lake smack dab in the middle of Beijing surrounded by enticing nightlife.
Diners will be served a scrumptious assortment of seasonal dishes, basted and broiled to perfection.
If our bodies long for an adventure we haven’t had since our misspent youth – we say, why certainly, yes! A convenient adventure that is; guests will be promptly and safely delivered to and from each stage of the Gala journey and still get back to the hotel early enough for a good night’s sleep before the final day of the conference. If you’re a night owl, you’ll also have the option to stay and kick back at the surrounding neon-lit guitar bars for a lakeside beer or wander around the lake at your own pace.
But don’t be fooled by the guise of just a great meal and environment! The evening has cunningly disguised networking opportunities for the benefit of guests’ business development as well as their enjoyment and relaxation.
How to get on board the Gala Dinner train?
On the registration page of the conference, there is an added option to attend the Gala dinner. For those who have already registered and did not check the option but would like to attend, you may pay for the Gala dinner at a later point, although we can’t guarantee available seats. There are already a very limited number of remaining spaces available. Register soon for a great night in the heart of Beijing!
Unlike this divisive Gala occasion, AZ China’s Gala Dinner won’t be half as awkward!
The all mighty and powerful NDRC has released the latest directives for industrial restructuring or consolidation. Under the carbon category, we have both anode and cathode in the ‘discouraged’ or ‘restricted’ list. Specifics provide that anode capacities under 80Kt and cathode capacities under 20Kt are to be limited and restricted. This means investment proposals for small capacities are likely to be rejected; there may be increasing costs and rules on existing capacities that fall under these categories.
From our research, there are 32 anode plants, totally 1,443Kt, under the restricted category; and 9 cathode plants with totally 94Kt. There is likely to be very limited effects on anode export since most small capacities concentrate in Henan, and the main exporting province of Shandong contain mostly sizable capacities and will not be affected much. In terms of cathode, Shanxi is the main exporting province of cathode in China. In the affected 32Kt capacities, there is only 5Kt that falls under the small capacity category, 17Kt belong to Rusal and the other 10Kt belong to Chalco. The new rules will not impact on cathode export materially.
This is much consolidation in action. We saw the same kind of moves from the NDRC during the capacity cleanup in the 11th 5year plan. The result was many small capacities closed temporally before more sprung up, particularly during the huge fiscal stimulus of 2009. The same challenge exists today. How will the administration keep a tap on over capacity and capacity additions? One of the ways is through regulation which is very much a custom in the Chinese economic machine. This time, regulation may stay for a longer period of time and we may see liquidity provision to tighten as well.
Word filtering though to us in AZ China has it that the Chinese have made another breakthrough in cathode technology.
We understand that Qingxin Carbon, the cathode plant in Ningxia province right by the former Alcan smelter, has been able to develop a block which breaks new size records. the new block, which is now being installed in Chalco’s 600KA plant in Liancheng, has dimensions of 720*560*3990. This makes the blocks 20mm wider and 30mm higher than the blocks presently used at that smelter.
Going higher should in normal circumstances increase the life of the block. There is more carbon between the liquid metal and the collector bar in the bottom of the block. Whether that happens for Chalco Liancheng is a matter of conjecture, since the smelter is only 12 months old.
Going wider is something else. We aren’t quite sure yet what the targeted gain is. I consulted with a friend of mine who forgotten more about cathodes than I will ever know. He tells me there are several possible gains to be had.
- one less block in the lining,
- just increasing the length of the pot with all other changes being increased proportionally (probably the most likely)
- thinner joints (there is a technology where they basically butt the blocks together with a thin layer of glue in the joint)
- reduce the width of the large joint along the headwall of the pot.
Either way, it’s an interesting move from a strategic viewpoint. Qingxin was already the only cathode plant in China that could make blocks to the old size. With Chalco accepting this new size into their 600KA line (and probably working closely with Qingxin on dimensions and specifications), the chances for other cathode plants to crack the 500KA and 600KA market just became a lot harder.
Chalco seems to be very confident in their new 500KA pots. They have lined 100% of the pots with Qingxin cathode blocks.
According to our sources, Qingxin has now supplied something near 4000 pieces to Chalco’s flagship plant in Liancheng. Since Liancheng has 288 pots, and assuming 10 - 12 blocks per pot, that aligns neatly with the information we heard, about the quantity delivered to Chalco so far.
So Chalco has a 100% supply agreement with Qingxin. That’s a brave call, in my opinion, in a plant which is using new technology. Of course, these blocks are massive, and long, and they have a unique shape, so probably Chalco had little choice when it came to finding someone who could extrude such sizes. But if it were me, I would be out there working with back-up suppliers, paying for them to make the mould, and removing size limitations along the production line. When you are the flagship plant, you don’t want to be brought undone by supplier problems. Qingxin is a good supplier, and I don’t mean to malign them, but it’s a big risk by Chalco in such an important plant. I will bet that Rio Tinto Alcan’s 600Ka plant is taking cathode blocks from multiple suppliers.
The next headache for the technical team at the Chalco 500KA plant will be to plan for the eventual failure of these cells. How long will they last, running at 500KA, and using 50% graphite? Of course, they will start a programmed phase-out of cells fairly soon, in order to avoid having all of them fail at the same time. But how to plan the phase-out program when this is the first plant to run with these technology parameters? If the cells only last 4 years, they will run into big problems if they under-plan the turnarounds. If the blocks last 8 years, they will spend a lot of money that they didn’t need to.
Of course, this assumes that cell turn-around is roughly 4 days (you need to wait for the pot to cool, lift it out of place, put in the replacement shell, and start the heat-up routine). That’s how long it took in Australia at my last plant, but who knows what corners are cut in the process in China.
This calculation is something that a lot of commentators miss when calculating a plant’s capacity. If a plant has 400 cells and each cell produces 2 tonnes per day, doesn’t that mean that the plant capacity is 292,000t? (400*2*365) Theoretically yes, but if the pot life is say 1800 - 2000 days (5 - 5.5 years), then you need to allow for the fact that each year you will have about 70 pots shutdown for about 4 days each. You have just lost 600 tonnes without even trying. At US$2500 per tonne, that’s $1.5 million lost each year. No wonder plant technical people push cathode life as a key parameter to the purchasing people.
If you were running an aluminium smelter with 500,000 amps running through each cell, what sort of cathode block would you plump for?
The modern market for such blocks can be divided into two - those which are made from anthracite, but with varying percentages of graphite added (commonly called graphitic block), or blocks which are made from petroleum coke. These blocks have an extra step, where they go into an electric in-line furnace, for a process which is called graphitisation. These blocks therefore, are called graphitised blocks.
The typical modern smelter these days, with currents of at least 300,000 to 400,000 amps (more usually referred to as 300kA - 400kA), usually opts to go to graphitised block. These blocks are better able to handle the incredible current densities, and resist voltage drop.
So if you were running Chalco’s new 500kA plant, wouldn’t you use graphitised blocks? Well, you would be wrong.
The new 500kA smelter in Liancheng, which is now going through start-up (it won’t be finished the start-up until June), has opted for graphitic blocks with 50% graphite. What’s more, we understand that the blocks came from one single producer. This was because the block size was beyond the capability of other manufacturers. With dimensions of 700*530*3990mm, these are quite bulky, weighing in at more than 1.5 tonnes each.
You might also be wondering if Chalco opted for the “chocolate block” shape, which has been the buzz of the cathode market these last 2 years. The answer is no, but not because they have used the traditional flat surface block, but because the shape is neither flat nor like a chocolate block.
But if you want to know more, you need to be a subscriber to our Black China Reports. I will provide more information in the April report, which is due out next week.
Much has been made in the foreign press about the Chinese breaking copyright, pirating, and generally claiming other people’s ideas as their own.
But the biggest victims of pirating by the Chinese are not only the music or film companies, the high tech companies or others that you hear about. The Chinese themselves are the losers.
In the last couple of years, there has been talk about new cathode technology being developed in China. The idea behind the concept is to reduce ACD* and thereby reduce DC current consumption. The way to do this in the eyes of the inventor was to create an additional channel across the cathode.
I am not an expert, but in my mind this idea is not supposed to work. The last thing you want on the floor of your reduction pot is channels where bits of anode, molten metal and gunk can all collect. But Chalco has more than 300 pots in operation using the new channel design, with some pots already chalking up their first birthday. Such is the success of the concept that privately Chalco are claiming to have reduced DC by 1000kwh.
That’s all very well, but last night over dinner, another technology company told me that the idea doesn’t belong to Chalco. According to my friend, the technology was invented and originally tested at a university in China’s North East. (That’s a clue for those of you who know China’s aluminium technology market.)
No way of knowing who is right. In China’ patents are based on “first to file”, not “first to invent”. But I hope it is the technology company, not Chalco, that came up with the concept. That way, it can be shared with others, for a total industry gain, rather than locked into Chalco smelters for a single competitive advantage.
Green coke
The market began to turn down last week, especially for high sulphur cokes. Zhenhai, China’s largest producer of high sulphur coke, dropped their market price by RMB80, while Gaoqiao dropped their price by RMB50. Even low sulphur cokes began to be affected by the turndown, though many list prices are yet to reflect the actual trade prices. Dagang decreased from 3900yuan/ton to 3100yuan/ton, a decrease of 800yuan/ton. Jinzhou and Jinxi petrochemical both went down another 600Yuan/ton, a total decrease of 900yuan/ton each in two weeks. High inventory levels are being blamed for the price reduction.
Calcined coke
The price of low sulphur calcined coke fell 300-500yuan/ton. However, moderate sulphur coke remains stable at RMB3,400 to 3,600.
Anode
The domestic price is continuing relatively stable, with prices remaining in the RMB4,500 to 4,800 range.
The export rebates available for manufacturers of anodes and cathodes has reportedly been scrapped. Effective August 1st, the 13% rebate will be removed. This is as a result of China’s crackdown on high energy-consuming, polluting products and those which consume scarce resources.
Industry insiders had espected the rebate to survive until 2009. But with the recent shortages of coal in many provinces, and the consequential brown-outs and black-outs occurring, it is no surprise that carbon products came under the microscope.
Given the high cost of raw materials, expect this rebate to be factored back into pricing to its full effect. It was not uncommon for manufacturers to use the rebate as their effective profit margin.
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