The Black China Blog

Alumina

With alumina plants still losing money, production cutbacks are growing in this area. Meanwhile some alumina plants are simply refusing to sell their goods at the current price.

Last week imported Alumina CIF price kept stable at 270-290US$/Ton. The imported product quoted price stayed at 2200-2400RMB/Ton, while the Domestic Non Chalco alumina price rose 150-200RMB/Ton to 2050-2150RMB/Ton, The price from Chalco remained at 2600RMB/Ton last week.

Aluminum

Aluminum price remained at 14000RMB/Ton last week.

Some good news last week:

1. Some aluminum products export tax rebate raised to 13%, while some aluminum products export tax decreased to 5% from 15%.

2. Due to the softening of electricity domestic demand, electricity generators were not only reducing their price, but are also giving some subsidies to aluminum smelters in order to encourage them to use more electricity.

3. Chinese Non-ferrous Metal Profession Association already proposed officially to the central government about the upper limit of aluminum strategic storage.

Aluminum production cost decreased to 12000RMB/Ton on average, as a result of cheaper electricity and pet coke/anodes. Some aluminum smelters that had reduced their amps started to produce again.

On the other hand, because of the decrease in production cost, the market price for aluminum is not likely to rise much in the near future. Some domestic ingot sales are being reported at as low as 12500RMB/Ton.

Green coke

The market for GPC was relatively stable in northeast and northwest regions last week. The price rose a little bit in China’s east and south and along river refineries.

In supply side, the supply of GPC has decreased in domestic market. Sinopec has decreased crude oil processing volume by 20% in November. The output of GPC decreased accordingly. In addition, some major refineries have stopped or will stop their cokers for overhaul. Coke use in CFB has consumed large quantities of GPC recently. According to statistics by one agency, the monthly consumption of self CFB reached 250,000 ton for Sinopec, which accounts for 20% of total national GPC production. Finally, November exports were around 15,000 ton, which also reduced the supply in the domestic market.

In demand side, the demand from the downstream products was still weak. However, the application of GPC as fuel has risen. It was estimated that there are at least 200,000ton GPC used as fuel.

Calcined coke

Due to the stability of low sulphur green coke price recently, last week the price of Low sulphur calcined coke kept stable at 1400-1600RMB/Ton. Low sulphur sales for Dongbei area suppliers have recovered slightly, but suppliers in Tianjin are still suffering.

Market prices for moderate Sulphur coke kept stable at 1300-1500RMB/Ton. However the actual deal price for this coke went up a bit (mostly in Jiangsu ,Henan, Xinjiang area - sales in Shandong last week were really bad).

High sulphur calcined coke price dropped 100RMB/Ton to 1000-1200RMB/Ton last week. Most high sulphur calcined coke in Jiangsu area was sold abroad, not much for domestic market .

Anode

Anode prices kept dropping last week. We saw drops of 200RMB/Ton to 3300–3600RMB/Ton. In Henan area some low-end anode prices were even down to 2400RMB/ton.

Now the most serious problem for anode producers is to get back their money. Suppliers who sell mainly to domestic market are facing cash flow problems. Some aluminium smelters are still allegedly defaulting on their debts.

We expect high-end anode prices will fall further. For export, last month the price was still higher than 4700RMB/Ton, with some suppliers achieving more than 5000RMB/Ton. But this month the anode export price started to drop as well. Recently the export price is around 3400-3800RMB/Ton.

Cathode

The price of cathodes in Shanxi region is comparative lower than other regions since there are more 10 cathode plants located that province. The lower end of the range for 30% graphite block is RMB7,500/ton, and 50% graphite is 7,800-8,000yuan/ton in some Shanxi plants. The quotation of 30% - 50% graphite cathode in other regions is above 9,000 Yuan/ton. The price of full graphite block is 11,000-12,000ton and graphitized block is 18,000-19,000yuan/ton.

It is expected the export of cathodes will reach 40,000ton in 2008, mainly from Shanxi province.