Source: Daily Economic News

Since this year, China's "high-speed rail export" has become a high-frequency news term. China and Russia signed a memorandum of cooperation on the development of Moscow-Kazan high-speed railway, and China Southern Railway submitted to California, USA, a tender letter of intent to participate in the construction of the high-speed railway in that state... Our leaders have also served as "super salesmen" for high-speed rail on many trips abroad.

The acceleration of China's high-speed rail "going out" has provided new market space for high-end automotive aluminium materials and reshaped the global competitiveness of Chinese manufacturing. And a group of leading aluminium processing enterprises represented by Zhongwang, China, will also show their strength and get more opportunities in the tide of high-speed rail globalization in China.

China's High-speed Railway is facing the global market in all directions

On October 13, 2014, the National Development and Reform Commission signed a memorandum of cooperation on high-speed rail with the Ministry of Transport of Russia, the China Railway Corporation and the Russian National Railway Corporation to promote the construction of the Eurasian high-speed transport corridor from Beijing to Moscow, giving priority to the implementation of the Moscow-Kazan high-speed rail project.

According to Russia's railway transportation development strategy issued before 2030, 20,000 kilometers of new railway, including 5,000 kilometers of high-speed railway, will be built in the future. Among them, the Moscow-Yekaterinburg High-speed Railway Project (Line 2) with a total length of 1595 km and the planned 803 km Moscow-Kazan section as a priority is the main project for which tenders for high-speed rail will be held soon.

Sources said that the high-speed rail project will start bidding as soon as next year, and is expected to attract high-speed rail manufacturers from China, Japan and Europe to participate. By comparison, China's high-speed rail has not only advantages of reliable operation, low construction cost and rich operation experience, but also unique competitive advantages. For example, the high-cold high-speed railway between Harbin and Shanghai, which is manufactured by China North Railway, can withstand the climate change of "ice and fire days" above 50 degrees centigrade, and is more suitable for the local environment and climate of Russia. Previously, Russia's high-speed rail market had a certain threshold of technical standards, and the signing of a memorandum of cooperation between high-level officials of China and Russia means that the relevant threshold problem may be solved.

Industry analysts point out that the total investment of Moscow-Kazan high-speed railway project is expected to exceed 20 billion US dollars, and the vehicle demand will exceed 2 billion US dollars in 10% proportion. Although the scale of a single project is small, considering the connectivity of railways, if the project is taken down, it means that China's high-speed rail technology is likely to be used in Russia's subsequent thousands of kilometres of new high-speed rail projects and tens of thousands of kilometres of railway renovation.

In addition to the Russian market, China's high-speed rail has made breakthroughs in Mexico, California, Thailand and other overseas markets. Industry insiders say preliminary estimates indicate that domestic enterprises have received more than 100 billion yuan in overseas railway orders this year, and China is currently negotiating high-speed rail cooperation with 230 countries.

The significance of China's high-speed rail export is extraordinary, not only the "going out" of a single industry, but also the "going out" of the whole industrial chain. At present, although the market size is small, once approved by overseas markets, it will rebuild the global brand image made in China and promote the development of the upstream and downstream segments of the industrial chain. For example, aluminum extrusion products of rail transit car body, high-speed locomotive, steel industry, electronic control and other industries are expected to meet greater market demand and development space.

Industrial aluminium extrusion products are an important part of high-speed railway industry

Aluminum extrusion products are the best material for high-speed railway to achieve lightweight. The density of aluminium is about one third of that of steel, and the alloys formed by adding certain elements have the same strength as steel. Therefore, while the strength rigidity meets the safety requirements of the high-speed railway carriage, the use of aluminum alloy can greatly reduce the weight of the high-speed railway carriage. Generally speaking, the aluminum alloy used in a high-speed railway carriage is about 10 tons, and the weight of the whole body is 30% - 50% less than that of all the steel used.

Aluminum alloy has excellent fire resistance and arc resistance. Although the melting point of aluminium is lower than that of steel, the fire resistance and arc resistance of car body are related not only to the melting point of material, but also to the thermal conductivity of material. Compared with steel, aluminium alloy has excellent thermal conductivity and better heat dissipation.

Aluminum alloy has better corrosion resistance. It is easy to form a dense oxide film on the surface of aluminium alloy, which has good antioxidant ability in the atmosphere. Therefore, the aluminium alloy car body has better corrosion resistance than the steel car body, especially where the car body is not easy to coat. At the same time, the surface of aluminium alloy can be chemically colored, painted and sprayed, which can further improve the corrosion resistance of aluminium components.

Aluminum alloy has excellent plasticity. With the development and application of large hollow and complex section aluminium profiles, the welding technology of aluminium profiles is progressing, and the manufacturing technology of aluminium alloy vehicles is becoming more and more mature. Aluminum alloy parts are easy to replace, no need for rust removal, suitable for various surface treatment, easy maintenance and recycling. The manufacturing process is greatly simplified and the workload required for manufacturing is greatly reduced compared with steel car body.

In the long run, the economy of aluminium alloy car body operation is very good. The high price of aluminium increases the cost of vehicle manufacturing, but because of the lightweight of aluminium alloy, the lightweight of vehicle brings the increase of transportation capacity, the reduction of energy consumption and the reduction of maintenance costs. Data show that every 10% reduction in vehicle weight can save 8% of fuel. In scrap recycling, aluminium extrusion products can achieve 100% recycling, recycling of recycled aluminium extrusion products can reduce energy consumption by 95%.

Based on the above advantages, as early as the 1950s, some developed countries in the world began to use aluminium extrusion products to manufacture railway vehicles, including the United States, Canada, Japan, Russia, Germany and France. At present, aluminium alloy materials have been widely used in domestic high-speed train carriages. Industry experts pointed out that the body of high-speed trains with speeds of over 300 kilometers per hour must be made of lightweight aluminium alloy, and that all trains with speeds of over 350 kilometers use aluminium extrusion products except chassis. Among the four types of CRHI, CRH2, CRH3 and CRH5 used by EMUs on China Railway Passenger Dedicated Line, except that CRHI body is made of stainless steel, the other three types of EMUs are made of aluminium alloy.

Aluminum extrusion products processing and manufacturing enterprises will usher in new business opportunities

China's independent manufacturing of high-speed railway carriages began in 2006, when small-scale production of aluminium alloy vehicles began; in 2008, Beijing-Tianjin Intercity High-speed was opened, and aluminium alloy trains with full independent intellectual property rights have been used. By 2013, 417 high-speed trains will be purchased in China. By the end of September 2014, China Railway Corporation's procurement bidding volume had reached 302 columns.

Reported that China's busiest high-speed railway - Beijing-Shanghai high-speed train procurement volume of 300, a total of 4800, an average of 3.632 per kilometer. Some experts have estimated that by 2020, about 44,000 high-speed rail vehicles will be purchased for the 12,000-kilometer high-speed railway built in China, averaging about 6,300 vehicles per year. Usually, about 10 tons of aluminium are purchased for each vehicle, including about 8 tons of extruded profiles, about 2 tons of other materials (sheets, foils, pipes, wires, forgings, etc.), and 70,000 tons of aluminium are required for the construction of railway stations and other facilities, on average, in the domestic high-speed railway market every year.

While the scale of domestic market is growing steadily, the overseas market is also in the process of cultivating. Although it is difficult to estimate the market scale of overseas exports of high-speed rail trains at present, it is believed that with the vigorous promotion of national leaders, China's high-speed rail "strides out to sea" is becoming a trend. Accordingly, the market demand for industrial aluminium extrusion products will gradually rise, which means that the domestic excellent industrial aluminium extrusion products brand will be pushed to the overseas market.

Although the market prospects are broad and the demonstration effect is obvious, there are only a few factories that can really enjoy the "big cake" of aluminum extrusion products for rail transit car body. Research reports show that few enterprises can produce such products in China, and few of them can meet the requirements of industrial aluminum extrusion products for high-speed rail. For example, only the top domestic aluminum processing enterprises such as Zhongwang have production capacity for aluminum extrusion products suitable for high-cold areas.

Zhongwang of China takes the leading position in the upstream of high-speed railway relying on its R&D strength.

According to the data, Zhongwang, founded in 1993, is the second largest manufacturer of industrial aluminium extrusion products in the world, and the largest manufacturer of industrial aluminium extrusion products in Asia and China. After more than 20 years of professional development, there are 93 international advanced aluminium extrusion production lines (including 21 large-scale aluminium extruder production lines of 75MN and above), with an annual capacity of more than 1 million tons. In addition, Zhongwang of China has ordered two 225MN super-large extruders, the largest and most advanced in the world, which are expected to be put into operation gradually from 2015. Strong equipment strength ensures that enterprises have the strength to produce high precision, large cross-section rail transit car body aluminum profiles.

In addition, Zhongwang, China has also built the largest special industrial aluminum extrusion die design and manufacturing center in Asia, which is closely linked to the industrial chain. It was awarded the qualification of "National Certified Enterprise Technology Center" by the Chinese Government in 2012. The completion of the deep processing center in June 2013 has further improved the production capacity of Zhongwang high-end industrial aluminium extrusion products. It is reported that since the commissioning of the deep processing center, the group has developed a series of all-aluminium transportation samples, including high-cold high-speed railway carriages, all-aluminium semi-trailers, all-aluminium fire trucks and so on, which has attracted wide attention in the industry.

Equipment strength and R&D strength bring the production capacity of aluminium extrusion products of rail transit car body to the fore in China. At present, Zhongwang is one of the few enterprises in China that can develop and manufacture aluminum extrusion products for high-speed railway car body with speeds ranging from 300 km/h, 350 km/h to 400 km/h. At present, only Zhongwang in China can produce some products with large cross-section, such as wide plates for the head of high-speed railway car. At the same time, Zhongwang is realizing the transition from providing car body parts to higher-end whole car production: the industrial aluminium extrusion product deep processing center can realize high-speed rail whole car welding through high-precision welding and surface treatment processes.

The R&D and production of high-end products have broken the barriers to trade in overseas markets, and at the same time found a new breakthrough for enterprises to achieve profit growth. According to Zhongwang's mid-2014 earnings report, the sales volume of its industrial aluminium extrusion products increased by 39.2% to about 37,000 tons annually, and the sales volume increased by 36.0% to about 990 million yuan compared with the same period last year. In order to meet the market demand for high-end products and intensive processed materials in higher value-added areas, China Zhongwang has invested heavily in the construction of an aluminium calender production base in Tianjin, which is expected to start production in 2015. At that time, high value-added products of aluminium sheet, strip and foil will be provided for industries including aerospace, rail transit, automobiles, food and pharmaceutical packaging, chemical containers, engineering equipment and other industries with strict technical requirements.

The high-speed rail industry represents the level of a country's high-end manufacturing industry. The fact that China's high-speed rail goes abroad means that the global market is positive about Chinese manufacturing. Leading domestic aluminium extrusion products enterprises such as Zhongwang, China, may usher in more development opportunities and market space by virtue of their strong technological research and development and production strength.

In China, Zhongwang is the only manufacturer that can provide high-speed rail sheet and profile.