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Heightened Competition Squeezes Margin for Secondary Aluminum Producers
Nov 29,2013 23:22CST
industry news
Source:SMM
China’s secondary aluminum producers have seen falling profitability this year given slipping prices and rising production costs, as well as fiercer competition.

SHANGHAI, Nov. 29 (SMM) –

Heightened Competition Squeezes Margin for Secondary Aluminum Producers 
China’s secondary aluminum producers have seen falling profitability this year given slipping prices and rising production costs, as well as fiercer competition. China’s secondary aluminum output dropped 3% year-on-year to about 3.5 million tonnes during the first three quarters, latest data showed.
 
Most secondary aluminum makers in China reported their costs at around 14,700 yuan per tonne, taking into account of recycling cost for scrap aluminum extrusion (12,000 yuan per tonne), the 15% loss during smelting, cost for energy consumption (600 yuan per tonne), and labor as well as transporting expenses. Meanwhile, prices for secondary aluminum dropped sharply during recent years due to overcapacity in China and global economic downturn, with ADC 12 aluminum alloy prices down from 2008’s 20,000 yuan per tonne to 15,100 yuan per tonne. That, combined with the 17% VAT, left profit for secondary aluminum smelters below 200 yuan per tonne. In this context, other factors, including failure in cost control, delayed payments from downstream producers, may easily drag smelters into losses.
 
China Starts Pilot Carbon Trade
China has introduced pilot carbon emission rights trading in three cities – Beijing, Shanghai and Guangdong, and planned to establish similar trading market nationwide during the 13th Five-Year Plan period. Deals have been done for carbon emission quotas in 2013, 2014, and 2015 on the first day for the launch of the trade in Shanghai, with traded prices for the first transactions at 27 yuan per tonne, 26 yuan per tonne, and 25 yuan a tonne, respectively. Total traded volume for carbon dioxide emission rights was 12,000 tonnes on the first trading day, with 6,000 tonnes for 2013 quotas, 5,000 tonnes for 2014 quotas, and 1,000 tonnes for 2015 quotas.
 
China secondary aluminum
China environmental drive

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