The cost of electrolytic aluminum continued to decline in May

Views:1536 Author:Site Editor Publish Time:2023-06-19 15:07:35 Orgin:Site

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The Mysteel aluminum research team conducted research on electrolytic aluminum companies across the country and calculated that the weighted average full cost of China's electrolytic aluminum industry in May 2023 was 16,222 yuan/ton, a decrease of 381 yuan/ton from the previous month. Compared with the average spot price of aluminum ingots of Shanghai Steel Union in May of 1837 yuan / ton, the profit of the whole industry is 2085 yuan / ton. Among the cost items of electrolytic aluminum, the cost of alumina decreased slightly, and the cost of anode and electricity contributed most of the decrease. Aluminum prices and costs both fell month-on-month, and the average profit of the electrolytic aluminum industry in May fell by a narrow range of 19 yuan/ton month-on-month.

The price of thermal coal keeps falling, and the smelter's financial caliber self-supplied electricity price response lags behind

Thermal coal prices have continued to drop sharply. According to Mysteel's May sample data, the pithead prices of 14 sample coal mines in Shaanxi have dropped by 60-282 yuan/ton compared with the end of April, with an average month-on-month drop of 160 yuan/ton. The pit mouth prices of 18 sample coal mines in Inner Mongolia were flat to down 160 yuan/ton compared with the end of April, with an average drop of 65 yuan/ton. The pit mouth prices of two sample coal mines in Xinjiang fell by 110-120 yuan/ton month-on-month. The price of steam coal trucks in ports decreased by 190-220 yuan/ton from the previous month, and that of Indonesian mines decreased by 90 yuan/ton from the previous month. The decline in thermal coal prices expanded across the board.

According to Mysteel research, as of June 2, 2023, the thermal coal inventory of 55 port samples was 75.064 million tons, an increase of 3.261 million tons from the previous month; 1.829 million tons, an increase of 52,000 tons from the previous month, and the available days were 23.6 days, an increase of 0.1 days from the previous month.

Mysteel conducts research on the coal-to-factory price of self-provided power plants of electrolytic aluminum enterprises across the country and calculates it after comprehensively considering the coal procurement and delivery cycle. The weighted average self-provided electricity price decreased by 0.022 yuan/kWh to 0.410 yuan/kWh. For the production capacity using self-provided electricity, the average cost of electricity decreased by 303 yuan/ton.

The price of purchased electricity has declined, and it is expected to continue to decline after entering the flood season

In terms of purchased electricity, in May, the purchased electricity price of electrolytic aluminum enterprises decreased slightly by 0.005 yuan/kWh to 0.474 yuan/kWh. The unstable output of clean energy power generation combined with the drop in coal prices led to a slight reduction in the price of electricity purchased from some grids. For production capacity produced using purchased electricity, the average cost of electricity in May dropped by about 62.6 yuan/ton.

According to comprehensive calculations, the weighted average electricity price of China's electrolytic aluminum industry in May was 0.434 yuan/kWh, a month-on-month decrease of 0.015 yuan/kWh, a decrease of 3.4%. Looking at the trend, considering that the self-provided electricity price of the aluminum plant's financial caliber has lagged behind in the response to the decline in thermal coal, and the hydropower part of the superimposed purchased electricity price will enter a wet season, it is expected that the industry-wide weighted average electricity cost will maintain a downward trend in June.

The price of alumina maintained a slight decline, and the production capacity has been overhauled

In May 2023, the domestic alumina spot price continued to decline slightly, and the weighted monthly average price of alumina was 2,880 yuan/ton, a decrease of 28 yuan/ton from the previous month, a month-on-month decrease of 0.96%. In the middle and early part of this month, some newly-built alumina projects in the north and south reached full production or gradually realized mass production, resulting in a significantly faster increase in supply than downstream demand, and an increase in the supply of goods that can be circulated in the market. Water was shipped, and prices in the north and south were under pressure. In the second half of this month, alumina production cuts and overhauls have occurred in Henan, Guizhou, Chongqing and other regions. Manufacturers are gradually willing to stand up for prices, but some traders are still pessimistic about the market outlook. Most of the low-price transactions are concentrated in traders and electrolytic aluminum plants. between. Until the end of the month, the contradiction between supply and demand in the market intensified, and downstream buyers often purchased at low prices. The pressure of competition in some areas in the north became increasingly prominent. The performance of the southern market was relatively flat. Affected by the expectation of the resumption of electrolytic aluminum production in Yunnan and the intensive production reduction and maintenance of alumina, the overall market was cautious and wait-and-see, and the short-term price was stable.

Looking forward to June, on the supply side, new projects in Shandong and Guangxi are expected to achieve mass production in June, and new production capacity in Hebei is already running at full capacity. In addition, alumina companies in Henan, Guizhou, Chongqing and other regions that are undergoing production reduction and maintenance are expected to resume production in the first ten days of June, and the utilization rate of regional production capacity will increase. Moreover, as the inventory pressure of enterprises increases, some holders still have a strong willingness to sell at low prices. In addition, the continuous negative decline in alumina prices has led to a gradual increase in the industry's loss rate, and the risk of production cuts by some companies with weak profitability has increased. If centralized production cuts are implemented, it will form a certain support for spot prices. To sum up, it is expected that domestic alumina spot prices will continue to operate under pressure in June, but the downward space is gradually narrowing, and the price is expected to usher in the possibility of bottoming out. Next month, it is predicted that the operating range of the spot price in the north will be 2,750-2,900 yuan/ton, and the operating range of the spot price in the south will be 2,700-2,800 yuan/ton. At the same time, alumina futures will be listed on June 19, and attention should be paid to the impact of futures price fluctuations on spot prices.

The price of anode has fallen with the cost, but the cost has shown signs of stabilization in the near future

According to Mysteel statistics, the national prebaked anode market price dropped sharply in May. The benchmark purchase price of prebaked anodes for large electrolytic aluminum enterprises in Shandong was 4,525 yuan/ton in May, a decrease of 850 yuan/ton from the previous month, a month-on-month decrease of 15.82%. The price of prebaked anodes continued to fall sharply due to lower-than-expected cost declines and lower-than-expected demand growth. Under the current market situation, the profitability of high-cost carbon blocks in the early stage is still insufficient. Anode companies are generally in the loss range, and the enthusiasm for production is not high. They mainly implement the existing contract production and sales, and are more cautious about raw material procurement.

From the perspective of supply, domestic production of prebaked anodes was relatively stable in May, and enterprises that had reduced production in the early stage continued to maintain low-load operations. Some enterprises gradually completed equipment maintenance at the end of the month, and individual enterprises had high anode inventories. Large-scale production has not yet been carried out. From the perspective of cost, raw material prices fluctuated in May, and the center of gravity of anode costs moved down slightly. Domestic petroleum coke resources were tight in the first half of the year, and the price of petroleum coke was pushed up. The price of coke rose weakly; in May, the coal tar pitch market fell first and then rose, and the price fluctuated significantly. Since the second half of the year, the price of raw materials for anodes has stabilized as a whole, and even rebounded one after another. It is expected that the month-on-month decline in anode prices will continue to narrow next month.

To sum up, among the cost items of electrolytic aluminum, the proportion of electricity cost is 36%, the proportion of alumina cost is 35%, and the proportion of anode cost is 15%.

Electrolytic aluminum maintains considerable profit operation, and the whole industry is profitable

In May, the cost difference between regions in the electrolytic aluminum industry narrowed. Among them, Guizhou became the province with the highest cost. Compared with Xinjiang, which has the lowest cost, the cost difference was 4,874 yuan/ton, and the difference between the two ends of the cost narrowed by 184 yuan/ton from the previous month. . The regions with electricity cost advantages are still the regions with the most significant cost advantages of electrolytic aluminum plants, such as Xinjiang, Inner Mongolia and Yunnan. With the output of clean energy such as wind power generation, Ningxia Qinghai also maintains a relatively high profit level. Affected by the coal procurement cycle, after investigation, the decline in thermal coal prices is reflected in the self-provided electricity price of the electrolytic aluminum factory in Henan Province, which drives the profit expansion of electrolytic aluminum in Henan Province.

Aluminum prices and costs both declined in May, and the profitability of electrolytic aluminum narrowed slightly. According to Mysteel's calculation, based on full cost, the theoretical profit ratio of the electrolytic aluminum industry in May was 97%. In terms of cash cost, the electrolytic aluminum industry was still profitable in May.

Mysteel expects the weighted average cost of the electrolytic aluminum industry to maintain a downward trend in June. In terms of cost items: In terms of electricity costs, some provinces will enter a flood season, and the influence of the coal purchase and settlement cycle of self-provided power plants will be superimposed. For the settlement cycle, it is expected that the month-on-month decline will be dominated by a slight decrease; the decline in anode costs will narrow.