Coal prices keep climbing, cost support lifts anode prices, October alumium costs expected to edge higher MoM

SMM, September 30:

According to SMM data, the average tax-inclusive full cost of the domestic aluminum smelting industry rose 0.3% MoM and fell 1.6% YoY in September 2026, mainly driven by higher power and auxiliary material costs during the period. The SMM A00 spot monthly average (Aug 26 – Sep 25) came in at RMB 24,218/t, up 1.9% MoM, expanding smelting profit to RMB 8,297/t, with average profitability up 80.9% YoY. Based on monthly average prices, 100% of domestic operating smelting capacity was in a profitable state in September.

Breaking down the cost components:

Alumina: According to SMM data, the SMM Alumina Index monthly average was RMB 2,676/t in September (Aug 26 – Sep 25), down 0.7% MoM. Supported by restarts and the ramp-up of newly commissioned capacity, alumina output rose further, inventories continued to build, and prices moved lower. Heading into October, although alumina is expected to remain a net exporter in the near term, domestic operating capacity stays high, supply remains ample, costs are expected to tick up slightly, and prices are likely to stay under pressure.

Auxiliary materials: In September, pre-baked anode prices rose modestly, with anode costs strengthening through the month. SMM tracking shows the October benchmark tender price at leading enterprises up RMB 400/t. Supported by rising costs, fluoride salt prices also edged up. Into October, supply keeps declining and spot availability is tightening, but cost support is weakening, so aluminum fluoride prices are not expected to see meaningful gains. Overall, auxiliary material costs for smelting are expected to rise in October.

Electricity: Affected by rising coal prices, electricity tariffs ticked up MoM in September. Into October, with coal prices showing no sign of decline, tariffs are expected to rise further, pushing smelting power costs higher.

In summary, the SMM weighted-average tax-inclusive full cost for the domestic smelting industry inched up in September 2026; in October, smelting costs are expected to hold steady in the RMB 15,900–16,300/t range.