Chinese aluminum smelters’ costs to fall below 16,000 yuan/mt in October – alumina prices the key driver [SMM analysis]

SMM News, October 9:

According to SMM data, the average tax-inclusive full cost of China's aluminum industry in September 2025 was 16,186 yuan/mt, down 1.5% MoM and 6.4% YoY, mainly due to the decline in the average monthly alumina price and lower costs during the period. Data from SMM shows that the monthly average of the SMM Alumina Index in September was 3,113 yuan/mt (August 26–September 25), and the weighted average alumina cost for the national aluminum industry fell 4.3% MoM. The average SMM A00 spot price was about 20,772 yuan/mt (August 26–September 25), with the average profit in the domestic aluminum industry at approximately 4,586 yuan/mt.

By the end of September 2025, domestic operating aluminum capacity reached 44.05 million mt, with the lowest full cost at about 13,540 yuan/mt and the highest full cost at around 19,657 yuan/mt. If calculated using monthly average prices, 100% of the operating aluminum capacity in China was profitable in September.

Cost side, from a breakdown perspective:

Alumina raw material side, SMM data indicates the monthly average of the SMM Alumina Index in September was 3,113 yuan/mt (August 26–September 25). During the month, both domestic and international alumina markets were in surplus, leading to price declines and a lower monthly average price. Entering October, the alumina supply-demand balance remains in surplus, and spot alumina prices are expected to remain in the doldrums in the short term, with the monthly average price projected to fall further. The alumina raw material cost for aluminum production is anticipated to decrease further in October.

In the auxiliary material market, prebaked anode prices edged up in September, while fluoride salt prices weakened slightly with a stable-to-soft trend, leading to a modest rebound in auxiliary material costs. In October, prebaked anode prices are expected to rise slightly; aluminum fluoride, due to rising fluorite raw material costs, is projected to see a noticeable increase, and aluminum auxiliary material costs are forecast to move higher.

Electricity prices, in September, were largely stable. Entering October, no significant variables affecting electricity prices have been identified so far, and prices are expected to remain largely stable.

In October 2025, alumina costs are projected to decline, auxiliary material costs are expected to rise, and electricity costs are forecast to remain stable. Overall, the impact of alumina dominates, and aluminum costs are anticipated to decrease further. Taking everything into account, SMM expects the average tax-inclusive full cost for China's aluminum industry in October 2025 to be around 15,800–16,200 yuan/mt.