SMM, December 26:
Price Review:
As of this Thursday, the SMM regional weighted index stood at 5,725 yuan/mt, down by 32 yuan/mt WoW. Among them, Shandong reported 5,700-5,770 yuan/mt, flat WoW; Henan reported 5,670-5,710 yuan/mt, down by 60 yuan/mt WoW; Shanxi reported 5,650-5,830 yuan/mt, down by 55 yuan/mt WoW; Guangxi reported 5,680-5,800 yuan/mt, flat WoW; Guizhou reported 5,680-5,800 yuan/mt, flat WoW; and Bayuquan reported 6,010-6,090 yuan/mt.
Overseas Market:
As of December 26, the FOB Western Australia alumina price was $670/mt, with an ocean freight rate of $22.45/mt. The USD/CNY exchange rate selling price was around 7.32, translating to a domestic mainstream port export selling price of approximately 5,806 yuan/mt, 81 yuan/mt higher than the domestic alumina price. The alumina import window remained closed. No new overseas alumina spot transactions were reported this week.
Domestic Market:
According to SMM data, as of this Thursday, the national weekly operating rate of alumina increased by 0.59 percentage points WoW to 85.94%. Among them, the weekly operating rate of alumina in Shandong remained flat WoW at 92.16%; in Shanxi, it decreased by 0.8 percentage points WoW to 77.23%; in Henan, it increased by 2.5 percentage points WoW to 69.17%; and in Guangxi, it remained flat WoW at 92.98%. During the period, alumina spot transactions remained sluggish. In Shanxi and Henan, alumina spot transaction prices slightly declined. Aluminum smelters in Xinjiang tendered for some alumina, with reported transaction prices delivered to the plant at 5,800-5,850 yuan/mt. Additionally, two alumina spot transactions were reported in Shanxi: one for 2,000 mt at 5,790 yuan/mt and another for 2,000 mt delivered to the plant at 5,700 yuan/mt, with freight costs of 175 yuan/mt. In Henan, 2,000 mt of alumina spot was transacted at 5,670 yuan/mt. In southwest Guizhou, 1,000 mt of alumina spot was transacted at 5,780 yuan/mt.
Overall:
On the supply side, domestic alumina operating rates remained high. Although some enterprises reduced roasting capacity due to winter environmental protection measures and maintenance, the significant profitability of alumina stimulated high production enthusiasm among alumina refineries, with some refineries slightly increasing their operating capacity. On the demand side, downstream aluminum smelters faced severe losses, with some smelters in south China undergoing minor maintenance and production cuts. Additionally, some smelters had planned to complete technological transformations for resumption of production, but progress stalled due to high raw material costs, leading to a slight decrease in demand. Overall, the tight supply situation of alumina has improved compared to before. However, buyers and sellers of alumina are still in a stage of negotiation. Suppliers maintain a sentiment to stand firm on quotes, while downstream players primarily execute long-term contracts and restock at lower prices, showing low acceptance of high prices. In the short term, prices are expected to remain stable with a slight downward trend.
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