Sina Finance News
According to Chalco’s 2019 Q3 report, domestic alumina prices were RMB 3,080 in Q3 2018, RMB 3,068 in Q4 2018, RMB 2,857 in Q1 2019, RMB 2,897 in Q2 2019 and RMB 2,556 in Q3 2019, with prices for Q3 2019 declining by 17% y-o-y and by 12% m-o-m. The domestic alumina industry has been buckling under low prices and faces severe losses. However, thanks to their 50% self-sufficiency of bauxite supply – a significant cost advantage – Chalco can still achieve breakeven, albeit at subpar performance.
By end-2018, Chalco had 18.86 mtpy of alumina capacity, the largest in the world. Apart from feeding its own needs for primary aluminium smelting, Chalco also sells its alumina on the market.
Domestic primary aluminium prices were RMB 14,300/t in Q3 2018, RMB 13,800/t in Q4 2018, RMB 13,500/t in Q1 2019, RMB 14,100/t in Q2 2019 and RMB 14,100/t in Q3 2019, with prices in Q3 2019 at the same level as the previous quarter but down 2% y-o-y. Declining alumina prices have leveraged primary aluminium production costs down and boosted substantial margin growth.