On December 8, Yuefeng Aluminum responded to investor inquiries on an interactive platform, stating that the company adopts a pricing model based on "aluminum ingot price plus processing fee." The aluminum ingot price is referenced to prevailing market rates, while the processing fee is negotiated with customers based on factors such as product specifications and manufacturing processes. The company's primary source of profit comes from this processing fee.
Fluctuations in aluminum ingot prices simultaneously affect both the company’s product selling prices and raw material procurement costs. In actual operations, for any given order, the timing of aluminum ingot procurement typically precedes the timing when the aluminum price is finalized for sales purposes. Consequently, sustained declines in aluminum ingot prices negatively impact the company’s current-period profits, whereas sustained price increases have a positive effect. Significant short-term volatility in aluminum prices can also affect inventory-related gains or losses. While short-term aluminum price movements do influence the company’s profitability, their long-term impact is relatively limited.
