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Aluminium: the impact of lower on-grid power tariffs in China


Aluminium: the impact of lower on-grid power tariffs in China

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 includes 1 file(s)

  • Aluminium: the impact of lower on-grid power tariffs in China PDF - 376.88 KB 5 Pages, 0 Tables, 5 Figures

Description

This Power Markets Insight report highlights the key issues surrounding this topic, and draws out the implications for those involved.

For participants, suppliers and advisors who want to look at the trends, risks and issues within the power industry, this report gives you an expert opinion and analysis to help inform your decision making.

Wood Mackenzie's detailed analysis and reliable market forecasts provide a strong reference, enabling a quick and concise description about the relationship between this event and its implications.

Underpinned by our extensive gas, coal and oil markets research, Wood Mackenzie's detailed analysis and reliable market forecasts provide a reliable foundation for investments and corporate planning. We help you understand key regulatory and economic drivers, and emerging industry trends in the power industry.

  • Executive summary
  • Background
  • Effect on smelter energy costs
  • Risks and outlook to China's power market

In this report there are 5 tables or charts, including:

  • Executive summary
  • Background
    • The impact of the new on grid and industrial power rates in China
  • Effect on smelter energy costs
    • 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
  • Risks and outlook to China's power market
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