Hongda hard aluminium alloy project marks shift to high-end industrial aluminium

Aluminium

The Hongda hard aluminium alloy project marks a strategic upgrade in the company’s product portfolio and technology base. Hongda has started trial production at the first phase of its high-strength hard aluminium alloy line in Gansu province. As a result, the Hongda hard aluminium alloy project positions the firm to supply lightweight aluminium products for automotive and aerospace customers.

The Hongda hard aluminium alloy project reflects a focused move into higher value downstream segments. The new facility will mainly produce lightweight aluminium components tailored to mobility and aerospace performance requirements. Investment totals 130mn yuan ($18mn), with expected annual sales of around 150mn yuan once fully ramped. Therefore, Hongda aims to lift revenue quality rather than chase pure volume growth in crowded commodity segments.

Hongda hard aluminium alloy project upgrades processes and product mix

The Hongda hard aluminium alloy project also transforms the company’s manufacturing processes. Hongda is upgrading from simple extrusion forming toward die-casting and precision processing routes. This shift supports tighter tolerances, more complex geometries and better surface quality for demanding industrial customers.

Historically, Hongda’s portfolio has focused on architectural aluminium products. These include aluminium alloy doors and windows, frames and plates for construction applications. However, the new hard aluminium alloy line expands into high-end industrial aluminium deep-fabricated products. As a result, market participants expect the project to widen margins by moving Hongda further up the value chain.

Process upgrades within the Hongda hard aluminium alloy project should also improve consistency and productivity. Precision processing strengthens Hongda’s ability to meet automotive and aerospace qualification standards. Meanwhile, die-casting can reduce material waste and enable lighter, integrated component designs. Together, these changes make the company less reliant on cyclical building and construction demand.

Domestic market pressure accelerates Hongda’s industrial pivot

Policy changes in China’s export regime provide important context for the Hongda hard aluminium alloy project. Beijing cancelled a 13pc export tax rebate on aluminium fabricated products in December 2024. This removal squeezed export profit margins and pushed more producers to redirect volumes into the domestic market. Therefore, competition in standard aluminium fabrication segments has intensified sharply.

Under these conditions, the Hongda hard aluminium alloy project is a defensive and offensive move. By focusing on high-strength hard aluminium alloys for autos and aerospace, Hongda targets segments with higher technical barriers. Meanwhile, deep fabrication capabilities support stronger brand loyalty and longer contracts, rather than purely price-based competition. However, success will depend on how quickly the company secures qualified programs with Tier-1 and OEM customers.

In the longer term, China’s push for lighter vehicles and more efficient aircraft will support specialised alloy demand. Companies able to offer integrated design, casting and machining solutions should capture a disproportionate share of this growth. Hongda’s new plant positions it to participate in that trend, while differentiating from lower-end architectural competitors.

The Metalnomist Commentary

Hongda’s move into high-strength hard aluminium alloys shows how Chinese fabricators are climbing the value chain under domestic margin pressure. If the company can translate process upgrades into stable aerospace and automotive orders, it will validate this higher-end strategy. Market participants should watch utilisation rates and customer wins at the Gansu facility as early indicators of project success.