The increase in industry electricity and raw material costs has led to a rise in total costs of aluminum smelters

In the week ending October 12, domestic aluminum spot cost continued to rise, primarily due to the robust performance of the alumina spot market. Additionally, in October, captive power plants of mainstream aluminum smelters have raised the bid prices for coal purchases multiple times, leading to a minor increase in power cost. Some electricity prices in the southwest region have also risen, causing the average electricity cost of domestic aluminum to increase by 0.006 yuan/kWh to 0.413 yuan/kWh.As of October 12, domestic aluminum full cost was around 16,151 yuan/mt, up 130 yuan/mt from pre-holiday level. During the week, the domestic aluminum spot price fell for four consecutive days, significantly reducing the immediate profit of aluminum smelters. As of October 12, the domestic aluminum spot price was about 19,250 yuan/mt and aluminum average spot profit was about 3,099 yuan/mt, down 730 yuan/mt from preholiday level. In summary, despite a temporary fall in coal price, domestic demand for coal is nearing its peak, and the strong need for downstream stockpiling suggests potential for a rebound in coal prices. Electricity costs in the industry are expected to steadily increase in Q4. Moreover, alumina and other raw and auxiliary materials prices and have been on the rise within the month. Therefore, in the short term, the cost of the domestic aluminum smelter is likely to continue to increase. We will continue to monitor changes in the coal and alumina markets.