Alumina Short Term--Costs and Prices

摘要

Because of the rapid changes in production costs, we have moved our estimates of production costs forward to the current quarter. According to our latest estimate, the average operating cost of alumina plants in the third quarter of 2008, measured in US dollars, was 349 dollars/tonne (287 dollars in 2008 Q2). For the western countries only this average was 317 dollars (272 dollars in 2008 Q2). The table shows the breakdown of these average production costs. To cover operating costs, capital charges and earn a normal return on equity, the average alumina plant needs a price of 396 dollars/tonne (333 dollars in 2008 Q2) FOB plant (ex works). At prices below 349 dollars/tonne the average producer does not cover operating (cash) costs. Our assessment is that major cuts in production will occur when prices approach a point 15 percent below the level at which the operating costs of 65 percent of the industry's capacity are covered. Under the conditions of 2008 Q3 this is 317 dollars per tonne, FOB plant (266 dollars in 2008 Q2). Spot alumina prices were for many years normally far below this level, but have been well above it. We also consider that the long-term marginal producer in the industry is at the level where 60 percent of the industry's total costs are covered. Under current conditions that is 384 dollars/tonnne (321 dollars in 2008 Q2).