Spot Alumina Prices See Larger Decline but Still Above Cost Line [SMM Analysis]

SMM, January 10:

As of today, the SMM alumina index has dropped to 5,321 yuan/mt, accumulating a decline of 448 yuan/mt from the peak in December 2024. In the latter part of this week, the decline in alumina prices widened, with spot transaction discounts against online prices expanding. From Thursday to Friday, spot alumina prices in northern regions saw a larger drop, reaching a decline of 100 yuan/mt.

Although imported bauxite prices surged rapidly since Q4 2024, the high proportion of long-term contracts, coupled with some enterprises still having partial self-supplied domestic ore, has to some extent lowered the average alumina production cost. In Q4 2024, according to the SMM quarterly alumina cost model, the national average alumina production cost was 3,171 yuan/mt, with the average cost in Shanxi and Henan regions relatively higher, ranging from 3,300-3,400 yuan/mt, and the highest cost approaching 3,700 yuan/mt.

Entering 2025, the price of imported bauxite from Guinea exceeded $100/mt, and long-term contract prices for bauxite in Q1 also saw a significant increase compared to Q4 2024, pushing the alumina cost support line significantly higher. Based on the SMM daily cost model, as of January 10, the production costs of alumina using imported bauxite in Shanxi and Henan have reached 3,800 yuan/mt and 4,100 yuan/mt, respectively.

SMM Comments: Although alumina costs have risen significantly compared to earlier periods, the average profit margin for alumina remains above 1,000 yuan/mt when compared to current spot prices. In the short term, the operating rate of alumina is unlikely to see a significant decline, and spot alumina prices are expected to continue their downward trend.

(The above information is based on market data collection and comprehensive evaluation by the SMM research team. The information provided herein is for reference only and does not constitute direct investment research advice. Clients should make prudent decisions and not replace independent judgment with this information. Any decisions made by clients are unrelated to SMM.)

Data Source: SMM Click on the SMM Industry Database for more information

(Mingxin Guo 021-51595800)