The Black China Blog

Alumina

Last week imported alumina CIF price went down 10US$/Ton to 300-320US$/Ton. The price from Chalco remained at 2900RMB/Ton. Chalco indicated that from the end of October they are starting another round of cut backs. They will continue to cut back on some high cost alumina plants.

Aluminium

Aluminium price (Chalco) dropped 400RMB/Ton to 14000RMB/Ton last week. Aluminium smelters wanted to sell as much they can to prevent more losses, so this caused aluminium market supply increase. But most aluminum buyers were waiting on the sidelines watching. Buyers entered the market when the price hit 13500-13800RMB/Ton. We have heard reports of stockpiling at this price, in expectation that the market is due to rise again.

Green coke

Green coke prices stabilised last week. Sellers were not prepared to drop any lower than 500RMB/ton, while buyers baulked at anything above 1000RMB. Coke prices are now competing with coal, except that coke has a higher heating value, bringing fuel buyers into play. Another factor causing the market to stabilise has been the recent announcements by refineries that they are cutting back production. Overseas buyers have started to make their presence felt as well. Contracts for next year are now being written.

Calcined coke

Along with the green coke price drop, last week the calcined coke suppliers had no other choice but continuously cut the price. The price of low sulphur calcined coke dropped 100-300RMB/Ton to 1400-1700RMB/Ton. The price in Jinxi area was 1400RMB/Ton last week. Moderate Sulphur coke dropped 200RMB/Ton to1400-1600RMB/Ton, while high sulphur calcined coke dropped 120-400RMB/Ton to 1080-1300RMB/Ton.

Recently the calcined coke suppliers’ operating rate has been less than 50% due to the cut back caused by high inventory level and difficulties of capital turnover. Some calcined coke suppliers stopped their calciner completely, and are just selling their storage goods.

Anode

Last week the domestic anode market slumped further. It dropped 200-300RMB/Ton to 3600-4000RMB/Ton. However, this is the market offer price, the actual deal price in Henan and Shandong has already slipped to around 3000RMB/Ton. Aluminium smelters kept cutting back, and this caused a serious decrease of anode market demand. Inventory levels are also rising, which is not a good position for anode producers to be in.

Meanwhile anode plants are facing another problem - the payment delay from aluminum smelters. This caused serious difficulties for some anode plant’s capital turnover. Some anode plants have already stopped producing and just selling their storage goods. How successful they will be at selling finished anodes on the open market is going to be interesting to see, but it does reveal a level of desperation in terms of cash flow and capital turnover.

This entry was posted on Thursday, November 13th, 2008 at 9:52 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.