Chinese Aluminum Smelters to Benefit from Power Tariff Cuts

SHANGHAI, Dec. 24 (SMM) – China’s State Council announced Wednesday to cut coal-fired on-grid power tariffs, which State Grid pays power generators and cut power tariffs that State Gird charges power industrial users from January 1, 2016.

This move comes as a welcome rain to domestic aluminum smelters, since power cost takes up almost 40% of their total costs. 

The power tariff cut is about 0.03 yuan (¢0.4632)/Kwh nationwide on average. Assuming 13,600 electricity is needed per tonnes of aluminum produced, the cut will equate to about 400 yuan cost savings for smelters. 

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