Alumina Supply Abundant, Short-Term Prices Under Pressure [SMM Alumina Morning Comment]

SMM Alumina Morning Comment 1.9

Futures:During the night session, the most-traded alumina futures AO2605 contract opened at 2,863 yuan/mt, reaching a high of 2,867 yuan/mt and a low of 2,781 yuan/mt, and finally closed at 2,797 yuan/mt, down 66 yuan/mt from the previous day. Open interest increased by 6,336 lots to 562,000 lots, indicating cautious market trading. From a technical perspective, the closing price was above MA5 (2,837.20), MA10 (2,790.50), and MA30 (2,748), suggesting some upside room remains in the short-term structure. Although the MACD indicator showed a golden cross at low levels with DIF (12.61) crossing above DEA (-11.28) and the histogram at 47.78, upward momentum still existed. Alumina futures are expected to remain in the doldrums in the near term.

Industry Updates:

1)According to SMM data, as of this Thursday, China's total built metallurgical-grade alumina capacity stood at 110.32 million mt/year, with total operating capacity at 88.82 million mt/year. The weekly national alumina operating rate increased by 0.12 percentage points WoW to 80.51%, as domestic alumina refineries stayed high in operations.2)On January 7, 2026, three alumina transactions were concluded outside China, with transaction prices as follows: (1) $312/mt FOB Western Australia, February shipment, trading volume of 30,000 mt; (2) $308/mt FOB Western Australia, February shipment, trading volume of 30,000 mt; (3) $307/mt FOB Eastern Australia, March shipment, trading volume of 30,000 mt.

Ore:As of January 8, 2026, the SMM imported bauxite index was at $67.61/mt, unchanged from the previous trading day. The SMM Guinea FOB average price was at $41.5/mt, unchanged from the previous trading day. The SMM Guinea bauxite CIF average price was at $65/mt, the SMM Australian low-temperature bauxite CIF average price at $64/mt, and the SMM Australian high-temperature bauxite CIF average price at $59/mt, all unchanged from the previous trading day. The Malaysian bauxite CIF average price was at $47.5/mt, and the Malaysian bauxite CIF (washed) average price at $62.5/mt, both unchanged from the previous trading day. The Ghanaian bauxite CIF price was at $81/mt, unchanged from the previous trading day. The bauxite CFR (Turkey) price was at $76.5/mt, unchanged from the previous Friday. On the domestic ore front, the tight supply situation eased compared to the earlier period. Alumina refinery bauxite inventory increased by 800,700 mt MoM to 57.0556 million mt. Coupled with spot alumina prices being under pressure, the intended transaction prices for domestic ore at alumina refineries continued to decline. Domestic ore prices are expected to have some downside room amid ongoing negotiations between sellers and buyers. On the imported ore front, the intended transaction prices of buyers and sellers declined compared to the earlier period. Current market transactions were sluggish, and some alumina refineries reported that purchasing plans remained cautious amid falling ore prices. SMM will continue to monitor production at domestic and overseas mines, port shipments, and price trends.

Spot Prices:As of January 8, 2025, the SMM alumina index was at 2,767.42 yuan/mt, down 4.67 yuan/mt MoM; the SMM Shandong alumina index at 2,591.82 yuan/mt, down 7.15 yuan/mt MoM; the SMM Henan alumina index at 2,671.04 yuan/mt, down 3.81 yuan/mt MoM; the SMM Shanxi alumina index at 2,655.14 yuan/mt, down 4.23 yuan/mt MoM; the SMM Guizhou alumina index at 2,750.89 yuan/mt, down 5 yuan/mt MoM; and the SMM Guangxi alumina index at 2,739.05 yuan/mt, down 4.04 yuan/mt MoM.

Spot-Futures Price Spread Daily Report:According to SMM data, as of January 8, 2026, the SMM alumina index was at a discount of 186.58 yuan/mt against the most-traded contract's latest transaction price at 11:30 AM.

Warrant Daily Report:The warrant daily report showed that on January 8, the total registered alumina warrants remained unchanged from the previous trading day at 154,800 mt. Specifically, the total registered alumina warrants in Shandong remained at 7,796 mt from the previous trading day. The total registered alumina warrants in Henan, Guangxi, and Gansu were all unchanged from the previous trading day at 0 mt. The total registered alumina warrants in Xinjiang also remained unchanged from the previous trading day at 144,700 mt.

Markets outside China:As of January 8, 2026, the FOB Western Australia alumina price was $310/mt, the ocean freight rate was $20.15/mt, and the USD/CNY selling rate was around 7. This price was equivalent to a selling price of approximately 2,692.27 yuan/mt at mainstream Chinese ports, slightly higher than the SMM alumina index price by 15.85 yuan/mt. According to the SMM model, the import window was closed.

Summary: The alumina market currently remained in a state of surplus, with inventory continuously rising and putting sustained pressure on spot prices. As earlier environmental protection-related controls and maintenance concluded, the industry operating rate saw a slight rebound, with weekly production reaching 1.703 million mt. On the inventory front, alumina refineries continued inventory buildup of 33,000 mt this week, aluminum enterprise raw material inventory increased by 9,000 mt, and port inventory rose by 88,000 mt, mainly because ex-China alumina prices had been consistently lower than domestic spot prices in the earlier period, attracting cargo inflows and impacting the Chinese market. Meanwhile, alumina shipping-to-delivery-warehouse profits were significant. Currently, the in-transit volume from futures-spot traders to Xinjiang increased, and alumina in-transit and platform stockpile inventory rose by 53,000 mt, bringing the total to 1.1 million mt. Overall, alumina inventory continued to accumulate. Going forward, close attention should be paid to changes in alumina warrants and whether more ex-China alumina cargo will enter China and further impact the market. Alumina inventory is expected to maintain an inventory buildup trend in the coming period, with spot alumina prices under pressure.

[Data other than publicly available information is derived from public information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.]