The cost of electrolytic aluminum fell for three consecutive months in China

In September 2022, the weighted average cost (including tax) of electrolytic aluminum in China was 17482 yuan / ton, down 182 yuan / ton or 1.0% month-on-month, which is the third consecutive month of decline since July; The overall performance of aluminum prices in September was a shock trend, and the average price of the Shanghai aluminum continuous contract was estimated to be 18520 yuan / ton, down 77 yuan / ton or 0.4% month-on-month, the cost moved down and the price was relatively stable, and the profit space of the industry expanded. The average profit estimate of the whole industry in September was 1038 yuan / ton, an increase of 105 yuan / ton over the previous month. According to Antaike's preliminary statistics, China's electrolytic aluminum production in September was about 3.363 million tons, of which the loss output accounted for 12.6%, narrowing by 3.5 percentage points from the previous month.

Electricity costs for electrolytic aluminum will increase in September. The industry-wide comprehensive weighted average electricity price in September was 0.443 yuan/kWh, down 1.8% or 0.008 yuan/kWh month-on-month. Among them, the self-owned electricity price is 0.452 yuan/kWh, down 0.016 yuan/kWh from the previous month; The price of network electricity was 0.429 yuan/kWh, which was basically the same as last month. During the cost calculation period, the price of coal fluctuated downward, which was the main reason for the decline in the price of self-owned electricity. However, since mid-to-late August, continuous extreme high temperatures in some areas have led to a significant increase in electricity demand, while the lack of water supply in the southwest has led to insufficient hydropower supply, and the increase in coal demand has led to a rebound in coal prices. Although the peak of electricity consumption in August has passed, with the arrival of the autumn and winter heating season, coal prices may continue to run at a high level in the future. If measured by the current coal price, the self-owned electricity price of some aluminum plants has reached more than 0.6 yuan/kWh. From the perspective of grid electricity prices, Yunnan and other regions are about to implement dry water prices that are higher than the current water harvest electricity prices, so the price of grid electricity is also facing the expectation of upward adjustment

It is difficult to see good news from the fundamentals of electrolytic aluminum, although the inventory is low but the consumption is not good, it has not reached the peak season level, and the price rise is more difficult. Although the reduction of production in Sichuan and Chongqing and the shortage of hydropower in Yunnan have caused the market to worry about the supply side, China's new production and resumption of production energy is relatively large, and China's production capacity is still at a high level in previous years from the total point of view. European production cuts and high electricity prices will be good for aluminum prices, but they will not form a long-term trend.