As of 20th April, the average production costs for domestic primary aluminum smelters had dropped to RMB11,700/t, in the wake of Shanxi alumina prices falling to RMB2,070/t and pre-baked anode prices falling to RMB2,830/t in eastern China. In Xinjiang, IM and Yunnan where electricity prices are low, smelters have lower production costs than the national average. Meanwhile, domestic aluminium prices have been on the rise, seeing smelters capable of RMB300/t in profits at present instead of the losses of RMB1，000/t experienced during late March for every tonne of aluminum produced.
With improved profit margins, domestic smelters have little intention of cutting operations. As a result, short-term aluminium supply is expected to be stable. However, with continued weak domestic demand in the real estate and automobile sectors in combination with a bleak outlook for aluminium product exports, China’s aluminium supply is expected to be in surplus in 2020.