Domestic Aluminum Price Move in Uptrend, Production Cost was Overstate

(China Aluminum Network) The industrial distribution of aluminum manufacturing enterprises has moved to the West, also with the application of captive power plant, the real production cost of aluminum ingots was lower than market expectation. Since captive power plants occupied large ratio, production cost only up 1-1.3%. Shandong Xinfa and Henan Shenhuo have built power-aluminum integration base in the West area, realized the reduction of electric power cost.

Thus, as the current electrolytic aluminium production cost, still remained over 1500 yuan profits for each ton. Aluminum production market with low entry threshold, also is the perfectly competitive market, certainly will attract more competitors to this market under such high profits. Capacity expansion may to be more fierce in the future, to limited aluminum price fundamentally.

The experts hold domestic aluminum price was move in an uptrend which was related to the market expectation, while the market expectation was derived from the intensive up-regulation power price. In terms of the market reaction, aluminum production cost was highly overrated.

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