Profit margins of aluminium smelters expanded

In the week ending Dec 14, domestic aluminium spot prices were stable. Coal prices rose slightly due to colder northern temperatures and post-accident production cuts. However, ample power plant coal inventories kept high-priced coal transactions minimal. The durability of this short-term coal price increase is uncertain, while domestic aluminium power costs have stayed mostly flat MoM. Alumina and raw auxiliary markets are stable. As of Dec 14, the domestic aluminium spot full cost was steady at 16,285 yuan/mt. In the week ending Dec 14, aluminium spot prices stopped falling and rebounded, boosting spot profitability. The spot price was about 18,630 yuan/mt, with an average profit of 2,345 yuan/mt, up 150 yuan/mt WoW. The market for raw and auxiliary materials is weak short-term, with no immediate drop in power costs expected, causing minor fluctuations in domestic aluminium costs. A notable disparity in electricity sources between southern and northern aluminium smelters creates distinct cost differences, with northern smelters holding a cost advantage.