1. China's electrolytic aluminum plant own power plant news:
Recently, Jilin and Shandong provinces have introduced electricity price adjustment policies, and self-provided power plants need to pay high cross-subsidy subsidies, which will have a greater impact on electrolytic aluminum enterprises and electrolytic aluminum industry. The collection of three types of self-supplied electricity (government funds, cross-subsidies, system backup fees) has a clear definition at the central level, and government funds have the possibility of replenishment, and actual implementation depends on local governments and Corporate negotiations were finalized. The main impact of the electrolytic aluminum enterprises in Shandong Province on the cost will be:
The first is cross-subsidy. “No. 115” stated that the cross-subsidy subsidy for self-supplied power plants during the buffer period from July 1, 2018 to December 31, 2019 was 0.05 yuan/kWh, which was 0.1016 yuan after 2020, and the electricity consumption per ton of aluminum was 13,500 degrees. It is estimated that the cost per ton of self-provided power plant during the buffer period is 675 yuan, and the cost per ton after the buffer period is about 1370 yuan.
The second is a government fund. If the company has previously paid the government fund, then the government fund will be reduced from 0.0504 yuan to 0.0291 yuan, saving 0.0213 yuan / kWh. However, if the company has not paid the government fund before, the enterprise will have to pay 0.0291 yuan after July 1, 2018, and the cost of aluminum singleton is expected to increase by 393 yuan.
The third is the payment of government funds. At present, it is still at the stage of the draft for comments, and the local government has not made a clear statement. Official documents are likely to be released in the fourth quarter. According to the requirements of the "Draft for Comment", the government funds that have been due in 2016 will be paid in 2018, which means that at least the government funds of 2016, 2017 and 2018 will be paid in 2018.
During the buffer period, the cost of electricity for some electrolytic aluminum enterprises will increase by 1,068 yuan. According to the "No. 115" text, for Shandong Electrolytic Aluminum self-supplied enterprises that have not paid government funds before, the cost of electricity during the buffer period will be 0.0791 yuan / kWh (0.05 + 0.0291), corresponding to the increase in the cost of electrolytic aluminum ton. 1068 yuan, if there are follow-up policies such as government fund replenishment, the cost may rise further. The rising cost of electrolytic aluminum enterprises in Shandong Province has led to the flattening of the left margin of the industry's marginal cost curve, and the effect of directly pushing up the price of electrolytic aluminum is limited. As the electrolytic aluminum in Shandong Province accounts for a large proportion of the country, the local cost increase has a certain upward effect on the average cost of the industry and even the price of electrolytic aluminum, and thus partially offsets the negative impact of the cost end. However, in the short term, the cost of electrolytic aluminum in Shandong Province is at a lower level in the industry, even if the production cost of 675 yuan is still not high.
The US Treasury has relaxed sanctions against Rusal, allowing customers to negotiate new contracts, while the global aluminum industry is facing further turmoil before the October 23 deadline. The sanctions against Rusal billionaire owner Oleg Deripaska have limited the annual production of the world's largest aluminum producer outside of China. Contract negotiations this month may disrupt the supply chain of key components in the automotive and aerospace industries.
3. Harbor: Even if the Rusal's sanctions are not cancelled, the aluminum price will fall in the next two years. Research firm Harbor Intelligence said that regardless of whether the United States maintains sanctions against Rusal, the world's second-largest aluminum producer, "we expect aluminum prices to decline in 2019 and 2020." Harbour said the London Metal Exchange aluminum price 2019 The average level will be about $1,925/ton, $1,870 in 2020, and the London Metal Exchange's aluminum settlement price will be $2,043 on Friday. “We believe that US sanctions will eventually be lifted (basic), but even if not cancelled, aluminum prices will only show a limited, short-term rise to the level of $2,350 per ton,” Harbor Managing Director Jorge Vazquez is giving customers Said in the report. This is because "Western countries will increase primary aluminum production at an unprecedented rate in the next 24 months." Also because the demand for primary aluminum is weakening, if US sanctions still exist, RUSAL will have “alternative markets and sales options”. According to analysts compiled by Bloomberg, the median forecast for aluminum prices in 2019 is $2,175/ton, and in 2020 it is $2,190.