China's National Development and Reform Commission (NDRC) said that producers that require 13,700-13,800 kilowatts to produce a ton of liquid aluminum will be charged an additional RMB0.02 per kilowatt, while those who exceed RMB13,800 per kilowatt must pay an additional RMB0.08 per kilowatt.
The surcharges would be effective increases of 1.8%-7.4% to produce the metal in Henan province.
Electricity accounts for around two-fifths of the cost producing aluminum, so even small electricity-pricing changes can impact profitability.
This is the first concrete step the government has taken to curtail aluminum overcapacity since the country's new leadership assumed office last year and since last month's reform blueprint, which outlined plans to cut industrial overcapacity.