Power Price at Aluminum Producers in Guizhou to Rise, Industry Sources

SHANGHAI, Mar. 21 (SMM) – Power price at domestic aluminum producers in Guizhou will be raised by 0.07-0.08 yuan/kwh from early April after coal price surge in the past half a year, cnmn.com.cn reported.

After the hike, power price at Guizhou’s aluminum producers will increase to 0.36 yuan /kwh.

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According to SMM estimation, power costs at aluminum producers in Guizhou will rise by 900-1,200 yuan per tonne after the hike, and this will lead to losses at local producers at current aluminum prices.

At present, total aluminum capacities in Guizhou are approximately 940,000 tonnes, accounting for 2.16 percent of China's total of 43.50 million tonnes in 2016, SMM survey finds.

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As around 80 percent of domestic aluminum producers are equipped with power plants, so the impact on the whole aluminum market will be small, SMM foresees.

One local aluminum producer said the company is under negotiating with local government over power price.

“Power price in Guizhou is closely linked to coal price, and the recent surge in coal market is the main reason behind the planned hike,” the producer said.

The company’s operational capacities are 280,000 tonnes, and produced 23,000 tonnes in February, with output to hold stable in March. The company has no aluminum inventories. 

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