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

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.