China to Impose Tiered Power Pricing for Aluminum

China will impose a tiered pricing mechanism of electricity on its aluminum producers starting January, the latest effort in Beijing’s campaign to encourage firms to cut back the capacity overhang in sectors such as aluminum, steel and cement.

Producers of the light metal will be charged different prices based on the amount of electricity they consume in the making of liquid aluminum, the National Development and Reform Commission said in a statement on Monday.

Power prices will remain unchanged for producers that consume no more than 13,700 kilowatts for each ton produced, while those that consume between 13,700-13,800 kilowatts per ton will be charged an additional 0.02 yuan per kilowatt, the NDRC said.

Producers that consume more than 13,800 kilowatts of electricity per ton will be charged an additional CNY0.08 per kilowatt, it added.

The NDRC also said local governments are not allowed to lower power prices for their aluminum producers and asked them to retract the preferential power prices if they had already been applied to those producers.

Local governments were also asked to collect government fees from aluminum producers that have their own power plants, the NDRC said.

Source: Moneymarket