In terms of raw materials, alumina prices inched lower last week. Despite a mild rally of thermal coal prices, the electricity prices of aluminium smelters were little changed as they were still digesting coal inventories stockpiled previously.

Prebaked anode prices traded at highs. The average cost of smelters slid 38.5 yuan/mt from a week ago to 18,087 yuan/mt as of last Friday, while the profit of smelters shrank 551 yuan/mt to 1,822 yuan/mt due to plummeting aluminium prices.

The SMM spot aluminium prices averaged 19,910 yuan/mt. In the short term, the prices of raw materials and auxiliary materials are expected to fall. However, given the approaching peak of power use, coal prices may not fall back in a short period of time. As such, the full costs of smelters will remain at a high level.