Insight
Aluminium: the impact of lower on-grid power tariffs in China
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Report summary
We have re-modelled Chinese aluminium energy costs in light of the recent reduction of on-grid power tariffs and found that the net impact to the average cash cost to local aluminium smelters is minimal. China's weighted average cash costs are expected to decline by just US$10/t following the reduction, to US$1868/t. This corresponds to a saving of US$310 million, which appears significant but not in an industry worth tens of billions of dollars.
What's included
This report contains
Table of contents
- Executive summary
- Background
- Effect on smelter energy costs
- Risks and outlook to China's power market
Tables and charts
This report includes 5 images and tables including:
Images
- The impact of the new on grid and industrial power rates in China
- Chinese total energy costs, US$/t
- Chinese M1 margin on ingot, US$/t
- More than 50% of the tariff cuts on a cost saving basis falls in three provinces
- US$310 million of potential savings to smelters
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