Rising Electricity Prices Pushed up Smelters’ Costs

Published: Sep 5, 2022 10:42

Source: SMM

Save

SHANGHAI, Sep 5 (SMM) - While prebaked anode benchmark purchase prices dropped slightly in September, rising coal prices and the arrival of the dry season led to an increase in the power costs of aluminium smelters. SMM data showed that the weighted average electricity price in the domestic aluminium industry increased 0.016 yuan/kWh from beginning of August to 0.453 yuan/kWh as of September 2. The SMM spot A00 aluminium prices fell for four consecutive days and averaged 18,110 yuan/mt last Friday, while the real-time cost of smelters rose 93 yuan/mt from a week ago to 18,007 yuan/mt, reducing the profits of smelters by 843 yuan/mt to just 103 yuan/mt. In view of rising power costs and limited decline in raw material prices, the profitability of smelters will barely improve in the short term.

Market

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

21 mins ago

China's Secondary Aluminum Alloy Ingot Inventory Down 562 mt, Driven by Foshan and Ningbo

[SMM Aluminum News Flash] Today, the inventory of secondary aluminum alloy ingots in major consumption areas in China was 29,400 mt, down 562 mt from the previous trading day. Destocking was mainly driven by Foshan and Ningbo: on one hand, tight supply of compliant raw materials led some producers to cut or halt production, and delivery demand boosted purchase willingness; on the other hand, frequent rainfall in Ningbo recently reduced warehouse receipts and increased warehouse withdrawals.

21 mins ago

51 mins ago

Divergent Downstream Consumption Coupled with Destocking, SHFE Aluminum Short-Term Oscillation and Adjustment [SMM Aluminum Morning Meeting Minutes]

[Divergence in Downstream Consumption Combined with Destocking: SHFE Aluminum Expected to Fluctuate in the Short Term] The tug-of-war between longs and shorts on the macro front has intensified. Amid geopolitical risks in the Middle East, wait-and-see sentiment in the market is expected to persist. The supply gap outside China is expected to provide strong floor support for aluminum prices, and expectations of rising energy costs are also expected to drive aluminum prices higher. However, high inventory pressure in China remains relatively pronounced and is expected to limit the upside room for domestic aluminum prices. In the short term, domestic aluminum prices are expected to mainly fluctuate and adjust.

51 mins ago

15 hours ago

Cost Pressure Continued to Intensify, June Aluminum Fluoride Tender Price Cut Implemented [SMM Fluoride Salt Weekly Review]

15 hours ago