Aluminium Smelters’ Profits Shrank to 2,000 yuan/mt amid Sharply Falling Aluminium Prices

Published: May 16, 2022 11:03

Source: SMM

Save

SHANGHAI, May 16 (SMM) - Power costs of aluminium smelters in Yunnan declined slightly after the province entered the rainy season.

SHANGHAI, May 16 (SMM) - Power costs of aluminium smelters in Yunnan declined slightly after the province entered the rainy season. Operating capacity in Yunnan was given more weight when SMM calculated the weighted average cost of smelters. As such, the average electricity price of operating aluminium capacity across the country dropped 0.024 yuan/kwh to 0.44 yuan/kwh last week. The prices of prebaked anodes jumped 746 yuan/mt MoM in May, while the prices of other auxiliary and raw materials remained largely stable. The average full cost of smelters rose 21 yuan/mt from the end of April to 18,242 yuan/mt last Friday, while the profit dropped 722 yuan/mt to 1,868 yuan/mt. In the short term, the domestic coal prices are expected to continue to decline under macro control, which will further ease the cost pressure of smelters with captive power plants. In addition, the arrival of the rainy season will also drive down the electricity prices of some aluminium smelters. Alumina prices will face downward pressure from growing supply. In this context, there is still room for a slight decline in aluminium costs.

Spot SMM

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

1 hour ago

Middle East Geopolitical Risks Ease Significantly; Aluminum Prices Expected to Hover at Highs in the Short Term [SMM Aluminum Morning Meeting Minutes]

[SMM Aluminum Morning Meeting Minutes: Geopolitical Risks in the Middle East Cool Significantly; Aluminum Prices to Fluctuate at Highs in the Short Term] Overall, from a macro perspective, easing geopolitical risks and the continued buildup of domestic social inventory have created bearish pressure on aluminum prices. However, the geopolitical situation in the Middle East remains unclear; if the conflict persists, expectations for a tightening of global aluminum supply are strong, and aluminum prices still have solid upward momentum. In the short term, aluminum prices are still expected to hold up well.

1 hour ago

Primary Aluminum Drove a Sharp Rally in Alloys, While the Raw Material Side Continued to Strengthen [SMM Cast Aluminum Alloy Morning Comment]

[SMM Cast Aluminum Alloy Morning Comment: Prices Pull Back as Aluminum Scrap Holders Are Reluctant to Sell; Overall Market Trading Remains Muted] Yesterday, the SMM ADC12 price rose by 500 yuan/mt, with the center of market quotations moving up markedly. Most producers’ price adjustments were concentrated in the 500–600 yuan/mt range. Recently, raw material prices have continued to strengthen, and the cost side has risen quickly, providing a clear lift to enterprise quotations. However, downstream demand has been relatively steady. Most enterprises reported that orders and inquiry activity were generally average, and downstream purchasing remains mainly restocking on an as-needed basis. Supported by cost-driven momentum and market expectations, enterprises have shown a clear willingness to raise prices. In the short term, against the backdrop of cost support and mild supply release, ADC12 prices are expected to hold up well. The medium-term trend will still depend on the recovery of end-use consumption. If die-casting industry orders increase significantly, the price center is expected to move up further; if demand recovery falls short of expectations, coupled with a continued rise in operating rates on the supply side, prices will shift from elevated levels into rangebound consolidation.

1 hour ago

17 hours ago

Secondary Aluminum Operating Rate Plunged in February March Recovery Was Set to Rebound Significantly [SMM Analysis]

[SMM Analysis]Secondary Aluminum Operating Rate Plunged in February March Recovery Was Set to Rebound Significantly

17 hours ago