Most-traded alumina contract hit a new high and then fell back, pay attention to the ore supply in Shanxi and Henan [SMM Comment]

The tightening supply and improving demand boosted alumina prices. Today, the most-traded alumina contract hit a record high of 3,859 yuan/ton before falling back. As of the day's closing, it rose by 0.75%, marking four consecutive days of gains.
Daily spot prices
Recently, the average spot price of SMM alumina continued to rise, and today it is reported at 3,420 yuan/ton, up 0.88% from the previous day, and has been rising for six consecutive days. SMM research shows that on the basis of maintaining a tight balance in spot supply, the opening of the recent spot-futures arbitrage window has brought a certain increase in demand to the spot market. Last week, the transaction price of alumina for delivery was at a high premium compared with non-delivery products. Holders are increasingly reluctant to sell, and multiple factors have jointly pushed spot transaction prices upward compared with the previous period.
Fundamentals
Supply: Bauxite mines in Shanxi and Henan have no plans for immediate production resumptions, and production resumptions at local alumina refineries are proceeding slowly. Operating rate of enterprises that rely on imported ores fluctuate greatly. A alumina refinery in Guangxi which halted production for maintenance will restart in early-April, and operating capacity will recover to 2.2 million mt. SMM sees China’s daily average alumina output at 221,800 mt/day in April and total operating capacity at 80.96 million mt, up 1.84% YoY.
Demand
The aluminum operating capacity continued to grow. Yunnan's power supply was relatively stable. According to SMM’s preliminary estimates, the operating aluminium capacity in China may recover to around 42.4 million mt.
SMM Outlook
From a fundamental perspective, on the supply, alumina plants are resuming production slowly, and short-term expectations for the recovery of ore supply in Shanxi and Henan are pessimistic; on the demand, aluminum operating capacity grew. Boosted by tightening supply and improving demand, alumina futures prices may go up in the short term.