Divergent Price Trends of Raw & Auxiliary Materials; Short‑Term Primary Aluminium Costs Expected to Remain Stable

SMM News, August 31:

SMM data shows that the average all‑in tax‑included cost of the domestic primary aluminium industry edged down by 0.7% month‑on‑month and 3.4% year‑on‑year in August 2026, mainly driven by modest declines in the monthly average prices of alumina and pre‑baked anode during the period. The monthly average SMM spot price of A00 aluminium (covering July 26 – August 25) stood at RMB 23,758 / tonne, rising 3.4% month‑on‑month. As a result, primary aluminium profit margins expanded to RMB 7,890 / tonne, with average earnings climbing 87.7% year‑on‑year. Calculated on a monthly average price basis, 100% of domestic operational primary‑aluminium capacity was profitable in August.

Breakdown by cost component:

1. Alumina：Per SMM statistics, the monthly SMM Alumina Index averaged RMB 2,695 / tonne (July 26 – August 25), falling by 1.8% month‑on‑month. Alumina inventories kept building through the month, keeping prices under pressure. Looking to September, alumina supply is expected to recover amid production‑restart expectations, while demand is projected to stay relatively stable. Spot alumina prices are likely to remain weak in the short term.
2. Auxiliary materials： In August, cost support weakened and supply increased substantially, pushing pre‑baked anode prices slightly lower. By contrast, aluminium fluoride prices moved up on rigid cost support combined with low operating rates. For September, pre‑baked anodes will find price support from high production costs, with marginal improvements in export orders lifting demand, which may lift prices moderately. For fluoride salts, costs remain elevated. Poor profitability will curb producers’ willingness to operate, and prices are expected to keep rising. Overall, auxiliary‑material costs for primary aluminium saw a modest rise in September.
3. Power tariff： Power prices ticked up slightly month‑on‑month in August. Looking ahead to September, coal‑price gains are set to push power tariffs moderately higher, leading to a slight increase in power costs for aluminium smelters.

To summarise, the SMM weighted‑average all‑in tax‑included cost for domestic primary aluminium dipped modestly in August 2026. The September primary‑aluminium cost is forecast to stabilise around RMB 15,700‑16,100 / tonne.