Profits at aluminium smelters dwindle by RMB954/t to RMB2590/t
Aluminium smelters' raw material costs were mostly steady last week. The removal of import levies and diminishing local demand drove down thermal coal prices.
As of Friday, April 29, the complete cost of smelting dropped by RMB 35 per tonne from a week before to stop at RMB 18,220 per tonne, while profits had plunged by RMB 954 per tonne to RMB 2,590 per tonne.
However, because grid power tariffs are fixed monthly, and smelters with captive power plants were digesting already acquired coal, their electricity rates stayed virtually stable for the time being, albeit they may fall in the future.
On the one hand, domestic coal prices have returned to a more reasonable range as a whole, which is good news for smelters with captive power plants. Prebaked anode costs, on the other hand, appear to have grown dramatically in May, as has the freight rate. As a result, short-term aluminium costs are expected to rise.
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