SHANGHAI, Nov 26 (SMM) – The smaller impact of 2018/2019 winter cuts and suspension of downstream aluminium smelters on high costs are likely to weigh on prices of prebaked anode in December, SMM expects.
In major production provinces of Shandong and Henan, some 1.96 million mt of capacity was cut for this winter, compared with around 6 million mt a year ago. The actual impact of the cutbacks is likely to fall short of the expected 1.96 million mt, as low prices of prebaked anode kept producers from reaching full production this year, SMM learned.
In Shandong, where prebaked anode capacity accounted for 30.8% of overall capacity in China, only 530,000 mt was required to suspend during the winter. A total of 14 prebaked anode plants in Henan received notices for winter cuts, affecting 1.43 million mt of capacity, an SMM survey found.
Downstream, more high-costs aluminium smelters are likely to cut production in the short run. Average production cost at those smelters was assessed at 14,800 yuan/mt as of Friday November 23.
In east China, prices of prebaked anode stood at 3,575-3,775 yuan/mt as of last Friday, flat from the start of October, according to SMM assessment.