Primary aluminium capacity cuts to exceed 2 million tonnes owing to weak ingot prices: SMM

According to a recent update by Shanghai Metals Market, primary aluminium capacity cuts expanded sharply in the second half of 2018 as weak aluminium prices and high operating costs caused an immense loss to the producers. Per the SMM research, production cuts for the year are likely to exceed 2 million tonnes.

A total of 1.98 million tonnes of primary aluminium capacity across 15 plants has been cut or will be cut this year, showed SMM as of November 19. The second half of the year saw major cuts of around 1.81 million tonnes.

According to another update by SMM, the A00 aluminium ingot price today, on November 20, plunged by RMB 10 per tonne after a rise for the past two consecutive days. The price today clocked at RMB 13,740 per tonne. The average prices are expected to range between RMB 13,720 per tonne and RMB 13,760 per tonne, with spot discounts to settle at RMB 60 per tonne to RMB 20 per tonne.

This decline in ingot price has also touched all the major markets in China. While the price in the east dropped by RMB 30 per tonne and stood at RMB 13,725 per tonne; the prices in the south and north plunged by RMB 10 per tonne and RMB 50 per tonne to hover at RMB 13,830 per tonne and RMB 13,720 per tonne, respectively.

However, the prices of the raw material showed no change today. November 13 was the last day when alumina spot price had registered a slight growth and since then recorded no further change. Bauxite too has been hovering at RMB 580 per tonne since November 5.

Other input costs like the pre-baked anode, aluminium fluoride and aluminium powder did not show any change either. The pre-baked anode is hovering at RMB 3675 per tonne since October 22, aluminium fluoride at RMB 11,500 per tonne since November 12, and aluminium powder at RMB 17.30 per kg since yesterday, November 19.

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