[SMM Flash: February Aluminum Industry Average Cost Exceeds 7,700 yuan/mt] According to SMM data, the domestic aluminum industry's tax-inclusive full cost average fell 0.9% MoM and 5.7% YoY in February 2026, mainly due to lower prices of raw material alumina and auxiliary materials. Aluminum profit margins expanded to 7,707 yuan/mt.

SMM February 28 news: According to SMM data, the average tax-inclusive full cost of China's aluminum industry in February 2026 fell 0.9% MoM and dropped 5.7% YoY. During the period, alumina raw material costs and auxiliary material costs declined, and the total cost pulled back slightly. The average SMM A00 spot price (January 26–February 25) in February was largely stable, and aluminum profit margins expanded to 7,707 yuan/mt. If the industry calculates based on the monthly average price, 100% of domestic operating aluminum capacity was profitable in February. Cost breakdown: Alumina raw material side : SMM data showed the average SMM alumina index in February was 2,621 yuan/mt (January 26–February 25), down 1.7% MoM. Production cuts at alumina plants during the month shifted inventory to destocking, but after the holiday, some aluminum smelters proactively reduced inventory, resulting in actual demand being lower than theoretical demand. Prices saw only a slight rebound by month-end, and the monthly average price dropped MoM. Entering March, alumina prices face both bullish and bearish factors. On one hand, operating alumina capacity is expected to decline MoM; on the other hand, aluminum smelters’ proactive destocking is expected to reduce demand. Overall, alumina raw material prices are projected to change by a relatively small margin. Auxiliary material market side : Both prebaked anode and fluoride salt prices pulled back in February. In March, prebaked anode and aluminum fluoride prices are expected to maintain a slight downward trend, and auxiliary material costs are projected to decrease. Electricity price side : Electricity prices were generally stable in February, with slight declines in some regions, leading to a small drop in the national average aluminum power cost. Entering March, electricity prices are expected to remain largely stable, and aluminum power costs are projected to hold steady. Overall, SMM expects the weighted average tax-inclusive full cost of China's aluminum industry in March 2026 to be largely stable, averaging around 15,750–16,150 yuan/mt.

SMM According to SMM data, the average tax-inclusive full cost of China's aluminum industry in January 2026 dropped 0.6% MoM and fell 19.5% YoY. During the period, raw material costs for alumina and auxiliary material costs for prebaked anode declined, while electricity and aluminum fluoride costs increased, resulting in a slight pullback in total cost. The average SMM A00 spot price in January was approximately 23,641 yuan/mt (December 26, 2025–January 25, 2026), with the monthly average aluminum price rising 1,840 yuan/mt MoM. Aluminum profit margins expanded to over 7,500 yuan/mt. If calculated using the monthly average price, 100% of domestic operating aluminum capacity was profitable in January. Cost breakdown: Alumina raw material side, SMM data showed the average SMM alumina index in January was 2,667 yuan/mt (December 26, 2025–January 25, 2026), down 4.6% MoM. Domestic alumina inventory continued to build up during the month, and prices declined gradually. Entering February 2026, operating alumina capacity is expected to decrease due to maintenance and production cuts, but spot alumina supply remains relatively ample. Spot alumina prices are likely to remain under pressure in the short term, with the monthly average price projected to fall MoM. Alumina raw material costs are expected to decline. Auxiliary material market side, prebaked anode prices dropped in January, while fluoride salt prices rose MoM. In February 2026, both prebaked anode and aluminum fluoride prices are expected to decline, and auxiliary material costs are projected to decrease. Electricity prices side, entering the dry season, electricity prices in provinces with high hydropower shares such as Yunnan and Sichuan increased significantly in January, raising the average national aluminum electricity cost. In February 2026, electricity prices are expected to stabilize, and aluminum electricity costs are projected to remain steady. Overall, SMM expects the weighted average tax-inclusive full cost of the domestic aluminum industry in February 2026 to decline MoM, with the average ranging around 15,700–16,100 yuan/mt.

[SMM Analysis: Short Month Hinders February Prebaked Anode Production Increase, Operating Recovery Fails to Reverse Output Decline] In February 2025, the production of prebaked anodes continued to decline, but overall operating conditions improved compared to the previous month. However, as February is a short month, overall production did not increase significantly. Currently, prebaked anode enterprises are producing based on orders, and industry supply remains relatively sufficient. On the demand side, it is expected that in March, with aluminum enterprises reaching full production after restarting their pots, the demand for prebaked anodes will perform well. Additionally, overseas orders for 2025 are also relatively optimistic, presenting a positive overall demand outlook. In the short term, prebaked anode enterprises are primarily focused on ensuring supply, while downstream aluminum enterprises are slightly increasing their operating rates steadily. SMM predicts that the operating conditions of prebaked anode enterprises may increase slightly in March. Further attention will be paid to the operating conditions of prebaked anode and downstream aluminum enterprises.

[SMM Analysis: Prebaked Anode Prices Soar in March, May Decline Next Month as Raw Material Prices Weaken] During the period, an aluminum enterprise in Shandong adjusted its prebaked anode tender benchmark price for March 2025, up 956 yuan/mt MoM. Meanwhile, another major domestic prebaked anode supplier also raised its March sales price, up 1,381 yuan/mt MoM. This price adjustment was driven by a significant increase in raw petroleum coke prices and a gradual rise in coal tar pitch prices, leading to a continuous increase in the cost of prebaked anodes. According to SMM calculations, as of March 6, the cost of prebaked anodes in China had reached approximately 6,032 yuan/mt.

The Details of the February Aluminum Market Hot Topic Are as Follows......

[SMM Data: Aluminum Profitability Recovers, Previously Curtailed Capacity Gradually Resumes in February] SMM, February 27: According to SMM statistics, domestic aluminum production in February 2025 (28 days) was up 0.4% YoY but down 9.5% MoM. The operating capacity of domestic aluminum increased MoM, primarily driven by the recovery in aluminum profitability, which encouraged production resumption among curtailed enterprises and the commissioning of replacement projects. During this year's Chinese New Year holiday, the casting ingot output of many aluminum plants fell short of expectations. Coupled with stable downstream purchases after the resumption of work and production, the industry's proportion of liquid aluminum rose by 1.7 percentage points MoM and 6.7 percentage points YoY to 71.0% this month. Based on SMM's proportion of liquid aluminum data, the casting ingot production of domestic aluminum in February decreased by 18.4% YoY to approximately 969,000 mt.

[SMM Data: Aluminum Profitability Recovers, Previously Curtailed Capacity Gradually Resumes in Early February] SMM, February 27: According to SMM statistics, China's aluminum production in February 2025 (28 days) was up 0.4% YoY but down 9.5% MoM. The operating capacity of domestic aluminum increased MoM, primarily driven by the recovery in aluminum profitability, which encouraged production resumption among curtailed enterprises and the commissioning of replacement projects. During this year's Chinese New Year holiday, the casting ingot output of many aluminum plants fell short of expectations. Coupled with stable downstream purchases after the resumption of work and production, the industry's proportion of liquid aluminum rose by 1.7 percentage points MoM and 6.7 percentage points YoY to 71.0% this month. Based on SMM's liquid aluminum proportion data, the casting ingot production in February was estimated to decrease by 18.4% YoY to approximately 969,000 mt.

[SMM Aluminum Price Weekly Review: Post-Holiday Downstream Gradually Recovers, Aluminum Price Center May Fluctuate at High Levels]

Overnight, the most-traded SHFE aluminum 2412 contract opened at 20,775 yuan/mt, reaching a high of 20,870 yuan/mt and a low of 20,705 yuan/mt, and closed at 20,725 yuan/mt, down 10 yuan/mt or 0.05% from the previous close.