Domestic Low-Priced Alumina Transactions Reported, Suppliers' Willingness to Sell Increases [SMM Morning Comment on Alumina]

SMM Morning Comment on Alumina 1.3

Futures Market: During the overnight session, the most-traded alumina 2502 contract opened at 4,688 yuan/mt, with a high of 4,688 yuan/mt and a low of 4,633 yuan/mt, closing at 4,663 yuan/mt, down 25 yuan/mt or 0.53%. Open interest stood at 127,000 lots, down 1,270 lots.

Industry Dynamics:

1. According to SMM data, as of this Thursday, the national weekly operating rate of alumina increased by 0.34 percentage points WoW to 86.27%. Among them, the weekly operating rate of alumina in Shandong decreased by 0.05 percentage points WoW to 92.11%; in Shanxi, it increased by 0.17 percentage points WoW to 77.40%; in Henan, it increased by 0.83 percentage points WoW to 70.00%; and in Guangxi, it increased by 0.97 percentage points WoW to 93.93%.

2. Spot Transactions: Aluminum smelters in Qinghai purchased 15,000 mt of spot alumina at a transaction price of 5,880 yuan/mt (delivered to Qinghai). In Shanxi, 2,000 mt of spot alumina were transacted at 5,400 yuan/mt. In Guangxi, 1,600 mt of spot alumina were transacted at 5,580 yuan/mt. In Henan, 2,000 mt of spot alumina were transacted at 5,530 yuan/mt.

Spot-Futures Price Spread Daily Report: According to SMM data, on January 2, the SMM alumina index showed a premium of 975 yuan/mt against the most-traded contract's latest transaction price at 11:30.

Warehouse Warrant Daily Report: On January 2, the total registered warehouse warrants for alumina remained unchanged from the previous trading day at 12,300 mt. In Shandong, the total registered warehouse warrants for alumina remained at 0 mt; in Henan, at 0 mt; in Guangxi, at 301 mt; in Gansu, at 0 mt; and in Xinjiang, at 12,000 mt.

Overseas Market: As of January 2, the FOB Western Australia alumina price was $670/mt, with ocean freight rates at $22.45/mt. The USD/CNY exchange rate selling price was around 7.32. This price translates to an external selling price of approximately 5,807 yuan/mt at major domestic ports, which is 132 yuan/mt higher than domestic alumina prices. The alumina import window remains closed.

Summary: Recently, the weekly operating rate of alumina rebounded slightly, and alumina supply increased slightly. With the technological transformation and production cuts in aluminum smelters in Guangxi, Sichuan, and other regions, alumina demand has slightly declined. The tight supply of alumina has eased compared to earlier periods. As of the end of December, the inventory of alumina raw materials at aluminum smelters rebounded slightly. Downstream restocking and purchasing enthusiasm weakened, and acceptance of high-priced spot alumina decreased. With reports of some low-price transactions, suppliers' willingness to sell has increased. In the short term, spot alumina prices may maintain a slight downward trend.

[The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make prudent decisions and not substitute this for independent judgment. Any decisions made by clients are unrelated to SMM.]