Alumina Prices To Extend Declines Amid Oversupply

SHANGHAI, May 4 (SMM) – Bauxite prices were stable, while caustic soda prices declined, bringing down alumina refineries’ costs. Refineries in Shanxi began to resume their production as they managed to make profits, which will exacerbate oversupply in the future. Suppliers began to dump their cargoes. Aluminium smelters still restocked only as needed and tried to push for lower prices. The short-term alumina prices are still in a downward trajectory in a buyer’s market.

There was no transaction in Henan last week. Purchases in Shanxi were still mainly based on rigid demand, even after local prices fell below 2,900 yuan/mt. Only two transactions were done in north China. One of them was made at 2,880 yuan/mt for shipment from Shanxi to Xinjiang, with a volume of 10,000 mt, and the other at 2,870 yuan/mt for shipment from Shanxi to Qinghai, with a volume of 15,000 mt. In south-west China, no deals were made in Guizhou and Guangxi last week. In Chongqing, a total of 10,000 mt of alumina was sold, with prices between 2,880-2,900 yuan/mt, bound for north-west China. According to SMM survey, output cuts in the domestic alumina industry were accompanied by capacity expansions. The operating alumina capacity rose 2.2% MoM to 79.96 million mt in April. One alumina refinery in Inner Mongolia was gradually shut down in April due to various reasons, and the time for resumption is unknown. Hebei Wenfeng’s Phase four project (1.2 million mt) and Lubei Chemical’s Phase two project (1 million mt) have begun to ship products into the market.