26 FEBRUARY 2014AlCircle.com
Rail freight rate hike pushes up West China’s Aluminum production costs
Edited by : AL CIRCLE
2 min read
The recent rail freight rate hike in West China is set to drive up the production costs at aluminum smelters, according to Shanghai Metals Market.
The National Development & Reform Commission (NDRC) of the country raised the rates of rail freight by an average 0.015 yuan ($ 0.00245) per tonne per kilometer.
The aluminium smelter in Xinjiang can be seen as a perfect example to witness the impact of this rate hike.
Smelters in this region source alumina from Shanxi, Henan, Guangxi and Shandong. As soon as the rate hike came into effect, the charges for freight from Zhengzhou to Urumqi went up 46 yuan per tonne, 50 yuan per tonne from Xiaoyi to Urumqi and 68 yuan per tonne from Nanning. If we assume that 1.95 tonne of alumina per tonne of aluminum isproduced, alumina costs would go high by 98 yuan per tonne.
There are aluminum smelters in Xinjiang that depend on prebaked anode that is supplied from other parts of country. Assuming that 0.5 tonne of prebaked anode per tonne of aluminum is produced cost of anode would also rise by 25 yuan per tonne.
Freight rates for shipping of aluminum ingot out of Xinjiang smelter to east China would go high by 60 yuan per tonne, which the smelters have to pay. The rail freight rate hike is cutting 183 yuan per tonne into the smelter margins.
The National Development & Reform Commission (NDRC) of the country raised the rates of rail freight by an average 0.015 yuan ($ 0.00245) per tonne per kilometer.
The aluminium smelter in Xinjiang can be seen as a perfect example to witness the impact of this rate hike.
Smelters in this region source alumina from Shanxi, Henan, Guangxi and Shandong. As soon as the rate hike came into effect, the charges for freight from Zhengzhou to Urumqi went up 46 yuan per tonne, 50 yuan per tonne from Xiaoyi to Urumqi and 68 yuan per tonne from Nanning. If we assume that 1.95 tonne of alumina per tonne of aluminum isproduced, alumina costs would go high by 98 yuan per tonne.
There are aluminum smelters in Xinjiang that depend on prebaked anode that is supplied from other parts of country. Assuming that 0.5 tonne of prebaked anode per tonne of aluminum is produced cost of anode would also rise by 25 yuan per tonne.
Freight rates for shipping of aluminum ingot out of Xinjiang smelter to east China would go high by 60 yuan per tonne, which the smelters have to pay. The rail freight rate hike is cutting 183 yuan per tonne into the smelter margins.
Previous article
City Council's agenda includes resolution to support Southern Aluminum expansion
Next articleGulf Aluminium Dinner concludes on a successful note
Grow with
AL Circle
