Increasing alumina prices drive aluminum smelters' operation costs up, lowering operating incomes

China’s leading aluminium companies have unanimously reported a downfall in operating income for the first three quarters of 2023. Risen operation costs of aluminium smelters driven by domestic alumina price hikes could be attributed to the drop in operating income. After over a year, in late October 2023, Chinese domestic alumina price exceeded RMB 3,000 per tonne level, standing at RMB 3,009 per tonne as of October 27.

On October 25, Yunnan Aluminium Co., Ltd. announced that operating income decreased by 5.27 per cent year-on-year to stand at RMB 12.091 billion during Q3 2023. The company’s net profit also shrank by 9.85 per cent during the same period to RMB 990 million.

Zhongfu Industrial Co., Ltd disclosed its operating income decreased by 2.06 per cent year-on-year in the first three quarters of 2023 to stand at RMB 13.643 billion. The net profit stood at RMB 794 million after plunging by 31.2 per cent year-on-year. However, in the third quarter of 2023, the net profit flaunted a surge of 123.13 per cent to RMB 380 million.

China Aluminium also earned lower operating income in the first three quarters of 2023. The income stood at RMB 188.404 billion, shrinking by 17.23 per cent year-on-year. The net profit came in at RMB 5.352 billion, down by 0.85 per cent year-on-year, despite a leap of 105.35 per cent per cent Y-o-Y in Q3 operating income to RMB 1.936 billion. The profit margin of the company’s primary aluminium also increased in Q3 2023 compared with the same period last year.

Wanshun New Materials posted a year-on-year decrease in revenue by 9.97 per cent in the first three quarters of 2023 to RMB 3.854 billion. The net profit was about RMB 15.25 million, down by 90.64 per cent Y-o-Y.