1. Fluctuations in Electricity Costs: The Dual Impact of Relaxing Price Limits and Restructuring Peak Regulation Mechanisms

The direct impact of the relaxation of price limits in the spot market

Risk of rising costs: As a typical high energy consuming industry (with electricity costs accounting for about 30%~40%), aluminum smelting may experience an increase in electricity prices during peak hours after the relaxation of spot market price restrictions, directly pushing up production costs.

Arbitrage space is evident: electricity prices may decrease during off peak periods due to increased market regulation capabilities, providing aluminum companies with opportunities for staggered production and reduced overall costs.

The implicit effect of integrating peak shaving functions

Exit of auxiliary service market: After the suspension of peak shaving, peak shaving and other markets, aluminum companies may not be able to obtain compensation through participating in auxiliary services and need to re evaluate their power procurement strategies.

Spot market dominant pricing: Peak shaving demand will be guided by spot market electricity price signals, and aluminum companies need to establish a dynamic electricity price response mechanism, such as stabilizing cost fluctuations through energy storage facilities or demand side management.

2. Transformation of Production and Operation Mode: From Passive Adaptation to Active Optimization

Requirement for increased flexibility in production scheduling

Peak valley arbitrage potential: Aluminum companies can optimize the start stop strategy of electrolytic cells, increasing production during low electricity price periods and reducing production during high electricity price periods, but need to balance the lifespan and energy efficiency of electrolytic cells.

Technical transformation demand: Low carbon aluminum electrolysis technology from enterprises such as China Aluminum International (such as extending the life of electrolytic cells and reducing energy consumption) will become the key to coping with electricity price fluctuations.

Green electricity procurement and carbon cost linkage

Strengthening the logic of green electricity aluminum premium: Under policy promotion, the carbon footprint advantage of green electricity aluminum will be more significant. Aluminum companies can reduce carbon tariff risks and enhance product premium capabilities by purchasing green electricity.

The value of green certificate trading is highlighted: as an “identity certificate” for green electricity consumption, or connected to the carbon market, aluminum companies can offset carbon emission costs through green certificate trading.

3. Reshaping the competitive landscape of the industrial chain

Regional differentiation intensifies

Developed regions in the electricity spot market: aluminum companies in hydropower rich areas such as Yunnan and Sichuan may expand their market share through the advantage of low electricity prices, while cost pressures increase in regions with high dependence on thermal power.

Self owned power plant enterprises: Aluminum enterprises with self owned power plants (such as Weiqiao Entrepreneurship) need to re evaluate the competitiveness of power generation costs and market electricity prices.

Industry concentration has increased

Raising technical barriers: The promotion of low-carbon aluminum electrolysis technology will accelerate the industry reshuffle, and small and medium-sized aluminum enterprises with outdated technology may be eliminated, further concentrating the market share of top enterprises.

Increased capital expenditure: The technological transformation of electrolytic cells, supporting energy storage facilities, etc. require significant investment, or promote aluminum companies to integrate resources through mergers and acquisitions.

4. Policy response and industry trends

Short-term strategy: cost control and hedging

Optimization of power procurement contracts: Signing medium – and long-term power contracts to lock in basic electricity consumption, and participating in spot market arbitrage with surplus electricity.

Financial instrument hedging: using derivatives such as electricity futures and options to manage electricity price risks.

Long-term layout: green transformation and technological iteration

Green aluminum production capacity expansion: supporting new energy generation projects (such as photovoltaics and wind power), building an integrated industrial chain of “aluminum electricity carbon”.

Technological route innovation: Developing disruptive technologies such as inert anodes and carbon free electrolysis to further reduce energy consumption and emissions.

5. Challenges and opportunities coexist, forcing the industry to upgrade

The policy, through the restructuring of the electricity market mechanism, has a dual impact on the aluminum industry of “cost push+green drive”. In the short term, fluctuations in electricity prices may compress profit margins, but in the long term, it will accelerate the industry’s transformation towards low-carbon and efficient directions. Aluminum companies need to proactively adapt to rule changes and transform policy pressures into competitive advantages through technological innovation, green power procurement, and refined management.