Costs of Chinese Aluminium Smelters to Drop

SHANGHAI, Mar 14 (SMM) - The recent wild swing in coal prices has led to great fluctuations in the power costs of smelters with captive power plants. However, in the short term, coal prices are unlikely to fall or rise significantly. On the one hand, supply of imported coal at ports and dwindling demand after the weather warms up will cap the upside room of coal prices. On the other hand, thermal power plants' coal purchase prices under long-term contracts are little changed, and tight hydropower supply in south-west China will keep local power prices at highs. After taking into account vulnerable alumina prices, aluminium costs should drop in the near future.