TAIYUAN, China, Oct 14 (Businesshala) – Aluminum processors in China are facing thin profits this year due to rising metal prices, the chairman of Shandong Nanshan Aluminum Co Ltd said on Thursday.
Prices of aluminum used in products ranging from food cans to airplanes have risen more than 50% so far this year, as the energy crisis and flooding in the metal’s world’s top producer China caused strong demand and production cuts. cut has been made.
“Aluminum prices have jumped significantly … .
The most traded November aluminum contract on the Shanghai Futures Exchange on Wednesday rose to a high of 24,165 yuan (3,752.80) per tonne since May 2006.
Three-month aluminum traded on the London Metal Exchange rose to $3,118.50 a tonne on Wednesday, a rate not seen since July 2008.
Lu expects fabricators’ revenue this year to be weaker than in 2020 and will face even tougher times after October.
“Upstream high aluminum prices have already been transmitted to fabricators, and fabricators have to shift costs to the downstream area,” he said, adding that it was uncertain whether aluminum end users would accept it. .
Electricity prices have hit record highs in recent weeks, driven by power shortages in Asia and Europe, China’s crisis expected to last through the end of the year and slowing growth in the world’s second-largest economy .
Along with steel, power-intensive aluminum smelting is expected to be one of the worst affected metal sectors.
In a webinar on Tuesday, Eoin Dinsmore, CRU’s head of primary aluminum and products, said, “Aluminum smelting has seven times more power than copper smelting, so aluminum is really an area that’s very hard to hit. “
China’s State Reserve Bureau has sold 280,000 tonnes of aluminum so far this year in an effort to reduce prices, but Lu said sales volumes were “very small” and would not have a big impact.
State-backed research house Antaike forecasts the Chinese aluminum market to switch from a surplus of 180,000 tons this year to a deficit of 200,000 tons in 2022, and Chinese state reserve sales 300,000 tons next year. ($1 = 6.4392 yuan) (Reporting by Min Zhang in Taiyuan and Mai Nguyen in Hanoi Editing by Mark Potter)