China Bauxite Imports Fell Back in February after Peaking in January 2023

Rio Tinto and Century Aluminum raised US billet premiums by around 12%, about 3 cents/lb. (around USD 110/t) above pre-war levels. Middle East disruptions have affected supply from the Persian Gulf, which accounts for about 20% of US imports, tightening domestic supply. The US Midwest premium has reached a record USD 1.1325/lb., while aluminum prices have risen over 10% since late February. Amid growing uncertainty, buyers are shifting to domestic sourcing, while producers are pushing for long-term contracts to secure pricing and supply.

[SMM Aluminum Express News] Tsingshan Holding Group, led by Chinese tycoon Xiang Guangda, is in advanced discussions with global trading houses Mercuria Energy Group, Glencore Plc, and Trafigura Group for minority investments in a proposed $3 billion aluminum smelter at the Weda Bay Industrial Park in Indonesia. The planned 800,000-tonne facility (likely in two 400,000-tonne phases) would give the traders direct access to aluminum output while helping Tsingshan reduce its capital burden and gain stronger support from Indonesian authorities. This move comes as global aluminum markets face strain from supply disruptions in the Gulf region and reflects Tsingshan’s continued expansion in Indonesia’s metals sector.

[Geopolitical Disruptions Combined with Supply-Demand Resonance, Aluminum Prices Hold Up Well at Highs] Overall, from a macro perspective, risks of Middle East conflicts persist, resonating with fundamental supply-side hard damage and low global inventory to jointly provide strong bottom support for aluminum prices. However, weak interest rate cut expectations, China's aluminum ingot inventory buildup exceeding expectations, and the adverse expectations on consumption and inflation from recent high fluctuations in oil prices have all notably weighed on the upside room for aluminum prices. In the short term, aluminum prices fluctuate at highs.