Newssummary: China’s Power Pricing Reform A Blessing or Misfortune for Aluminum Industry?

SHANGHAI, Mar. 11 (SMM) – China will soon issue Suggestions on Deepening Power Pricing Reform, 21st Century Business Herald cited Wang Yumin, Deputy Director of the National Energy Agency as saying. 

   

The focus of this move is to move away from a centrally monitored pricing mechanism to a more market-driven approach, Mr. Wang said. 

 

Aluminum smelters will definitely stand to benefit once power pricing reform is introduced. The reform will help cut power tariffs by creating a more competitive market. Hence, power costs – over 30% of total costs for aluminum smelting – could fall dramatically, 21st Century Business Herald quoted Shenwan Hongyuan Securities as saying. 

 

Aluminum smelters, though cheered up by this news, should caution that falling costs could trigger restarts of idled capacity, which would weigh on aluminum prices, 21st Century Business Herald quoted Cinda Futures.