Cost and price run counter to electrolytic aluminum industry profit narrow

Mysteel aluminum research team investigated and estimated that the weighted average total cost of China’s electrolytic aluminum industry in April 2022 was 17,152 yuan/ton, up 479 yuan/ton compared with March. Compared with the average spot price of 21569 yuan/ton of Shanghai Iron and Steel Association, the whole industry made a profit of 4417 yuan/ton. In April, all cost items were mixed, among which the price of alumina declined significantly, the price of electricity fluctuated in different regions but the overall performance rose, and the price of pre-baked anode continued to rise. In April, costs and prices went in the opposite direction, with costs rising and prices falling, and the industry’s average profit decreased by 1541 yuan/ton compared with March.
April due to the domestic epidemic multipoint appeared and the grim situation of local area, on the whole market liquidity, the traditional peak season never came, and as the degradation and prevention and control of epidemic grows, market participants on the year’s economic growth concerns rise, combined with the electrolytic aluminium production capacity and new production release is still accelerating, prices in supply is greater than demand mismatch of the structure under weaker, That, in turn, affects corporate profits.

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April electrolytic aluminium enterprises should bring along their own domestic electricity prices climbed, while guarantee for steady price policy throughout the coal industry, but because of the self-provided power plant of electrolytic aluminium enterprises most does not have long association order, affected by the outbreak of the external factors such as transportation, daqin line accident interference, coupled with the late again appeared in 2021, the concerns of the phenomenon of shortage of coal, the self-provided power plant of aluminum plant are increasing inventory reserves of coal, Spot purchase prices also rose accordingly.
The latest data from the National Bureau of Statistics showed that the cumulative output of raw coal from January to March was 1,083859 million tons, up 10.3% year on year. In March, 396 million tons of raw coal was produced, up 14.8% year on year, 4.5 percentage points higher than january-February. Since March, the policy of increasing coal production and supply has been intensified, and major coal-producing provinces and regions have made all-out efforts to tap potential and expand capacity to increase coal supply. At the same time, due to the increase in hydropower and other clean energy output, power plants and other major demanderscontrol the procurement pace. According to Mysteel statistics, as of April 29, the total coal storage in 72 sample areas of the country was 10.446 million tons, with 393,000 tons of daily consumption and 26.6 days of available days, significantly increased from 19.7 days in the survey at the end of March.

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Considering the procurement and delivery cycle of coal, according to the monthly average coal price, the weighted average self-provided electricity price of the whole industry in April was 0.42 yuan/KWH, 0.014 yuan/KWH higher than that of March. For the capacity using self-provided electricity, the average power cost increased by about 190 yuan/ton.

Compared with March, the purchased electricity price of domestic electrolytic aluminum enterprises increased significantly in April, and the degree of marketization transaction of electric power became more and more high. The purchased electricity price of enterprises was no longer the lock mode of one price in the previous two years, but changed month by month. There are also many factors affecting the purchased electricity price, such as the coal-electricity linkage factor of power plant, the step electricity price paid by aluminum plant, and the change of the proportion of clean energy in the purchased electricity. The high power consumption caused by the unstable production of electrolytic aluminum is also the main reason for the increase of the power cost of some enterprises, such as Guangxi and Yunnan. Mysteel research statistics, in April national electrolytic aluminum enterprises to implement the weighted average outsourcing electricity price of 0.465 yuan/degree, compared with March increased by 0.03 yuan/degree. For the production capacity using grid power, the average increase in power costs of about 400 yuan/ton.

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According to comprehensive calculation, the weighted average electricity price of China’s electrolytic aluminum industry in April was 0.438 yuan/KWH, 0.02 yuan/KWH higher than that of March. The trend is that the pace of outsourcing will be adjusted as the coal inventory of aluminum plants is guaranteed. The coal price is currently facing many influencing factors. On the one hand, it is the implementation of the policy of ensuring supply and stabilizing prices. On the other hand, the demand for electricity will increase with the epidemic, but the contribution of hydropower will continue to increase with the coming of the wet season. However, the purchased electricity price will face a downward trend. Southwest China has entered the wet season, and the electricity price of Yunnan electrolytic aluminum enterprises will fall significantly. Meanwhile, some enterprises with high electricity price are actively striving to reduce the electricity price. Overall, industry – wide electricity costs will fall in May.

Alumina prices from the second half of February began to expand the decline, and the decline through the whole march, in late March weak stability, until the end of April, a small rebound, and in April electrolytic aluminum cost measurement cycle shows alumina cost significantly decreased. Due to the different supply and demand structure in the region, the decline is different in the south and north, among which the decline in the southwest is 110-120 yuan/ton, while the decline in the north is between 140-160 yuan/ton.

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The trend shows that the profit level of electrolytic aluminum industry will change greatly in May. With the decline of aluminum price, some high-cost enterprises enter the edge of total cost loss.


Post time: May-13-2022