Shandong province sets charges on captive power plants

Published: Sep 14, 2018 12:47

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The province's price bureau setcharges at 0.1016 yuan/kWh, with an adjustment period from Jul 1, 2018 to Dec 31, 2019

SHANGHAI, Sep 14 (SMM) – Shandong province set the charges over captive power plants earlier this week. This is likely to raise the costs for primary aluminium production and bolster prices, SMM senior analyst Liu Xiaolei believes.

The province's price bureau set the charges at 0.1016 yuan/kWh, with an adjustment period from July 1, 2018 to December 31, 2019. Charges stand at 0.05 yuan/kWh during adjustment.

The charge of 0.05 yuan/kWh will drive costs up by 680 yuan to produce one tonne of primary aluminium. Liu expects prices of primary aluminium to trade at 14,500-15,500 yuan/mt in the fourth quarter of the year.

Alumina prices are also unlikely to grow significantly given positive developments in Hydro’s alumina operations in Brazil and as concerns over China’s winter output curbs eased, Liu expects.

He also sees limited downward room in alumina prices as strikes at Alcoa’s alumina operations in Western Australia reduced the company’s output.

Aluminium

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