China Nonferrous Metals News
SMM: Since the beginning of August, domestic primary aluminium smelters have been taking profits of RMB 800~1,000/t (based on full average production costs), marking a new 2-year high.
The increase in margins can be attributed to rapidly rising aluminium prices and falling raw material prices. At the beginning of August, mainstream 3-month contracted aluminium prices at SHFE were hovering around RMB 13,800/t, but by end-August, prices had climbed to a high point of RMB 14,200/t, subsequently buoying spot prices. Meanwhile, domestic alumina prices have been stable at the relatively low level at RMB 2,500/t, despite a recent slight rebound. Prices for pre-bake anode have been in decline since early August, falling from RMB 3,500/t to RMB 3,100/t.
SMM forecast relatively high profit margins for domestic smelters in the short- term, with high profits stimulating smelters to accelerate the pace of new capacity startups and resuming previously idled capacity.