Aluminium smelters’ profits expanded thanks to falling auxiliary material prices

For the week ending November 2, domestic alumina market continued strong performance, with SMM's spot prices around 3,010 yuan/mt. Significant disturbances on the supply side suggest a short-term upward trend. The coal market experienced price drops due to ample spot supply and poor stock replenishment from downstream aluminium smelters. Major captive power plants in Shandong reduced their November coal purchase prices, indicating no significant future rise in aluminium smelters' electricity cost. As of November 2, China's aluminium spot full cost was around 16,180 yuan/mt, down 51 yuan/mt MoM. The spot price of aluminium increased, expanding aluminium industry profitability. The domestic spot price of aluminium was about 19,190 yuan/mt, with the average immediate profit around 3,010 yuan/mt, up 222 yuan/mt WoW. In the short term, downward pressure on coal price will limit the expected rise in aluminium's electricity cost. Along with expected reductions in November purchase prices for auxiliary materials like prebaked anode offsetting a minor alumina increase, the cost of domestic aluminium is expected to fluctuate within a narrow range.