Power Costs of Aluminium Smelters Rose on Average due to Restarts of High-Cost Capacity

SHANGHAI, Dec 19 (SMM) - The domestic alumina prices rose slightly last week amid positive fundamentals. The average power cost of aluminium smelters rose, driven by the resumption of high-cost capacity in Guangxi and rising power tariffs in south-west China with the onset of dry season. According to SMM data, the weighted average electricity price of smelters increased 0.013 yuan/kwh MoM to 0.466 yuan/kwh. The full costs of smelters added 187 yuan/mt from a week ago to 18,065 yuan/mt as of last Friday, while the profits shrank 607 yuan/mt to 775 yuan/mt. SMM A00 aluminium prices fell below 19,000 yuan/mt last week, and stood at 18,840 yuan/mt on Friday.
The power costs will hardly fall in winter. Following the recent rise in raw material and auxiliary material prices, smelters’ costs may still have room to rise. Poor consumption may weigh on aluminium prices. Therefore, the profits of smelters are likely to shrink further in the short term.