SMM, January 16:
Price Review:
As of this Thursday, the SMM regional weighted index stood at 4,698 yuan/mt, down 711 yuan/mt WoW. Among them, Shanxi reported 4,600-4,700 yuan/mt, down 780 yuan/mt WoW; Henan reported 4,500-4,600 yuan/mt, down 730 yuan/mt WoW; Shanxi reported 4,500-4,600 yuan/mt, down 750 yuan/mt WoW; Guangxi reported 5,080-5,120 yuan/mt, down 540 yuan/mt WoW; Guizhou reported 5,000-5,100 yuan/mt, down 600 yuan/mt WoW; Bayuquan reported 5,460-5,540 yuan/mt.
Overseas Market:
As of January 16, 2025, FOB Western Australia alumina prices were $610/mt, with ocean freight rates at $20.90/mt. The USD/CNY exchange rate selling price was around 7.35, translating to an external selling price of approximately 5,321 yuan/mt at major domestic ports, 622 yuan/mt higher than domestic alumina prices. The alumina import window remained closed. This week, three new overseas alumina spot transactions were recorded: 1) On January 10, 30,000 mt of alumina was sold overseas for April delivery, with the source chosen by the seller, priced at $610/mt FOB Western Australia, $607/mt FOB Eastern Australia, or $616/mt FOB India/Indonesia; 2) On January 13, 30,000 mt of alumina was sold overseas at $672/mt FOB Brazil, with February shipment; 3) On January 13, 30,000 mt of alumina was sold overseas at $635/mt FOB Visakhapatnam, India, with late February shipment. Overall, overseas alumina spot prices showed a pullback trend, but the decline was less pronounced than that of domestic alumina spot prices. The import loss widened, and if overseas alumina prices stabilize while domestic alumina spot prices continue to fall, the alumina export window may gradually open.
Domestic Market:
According to SMM data, as of this Thursday, the national weekly operating rate of alumina increased by 0.49 percentage points WoW to 87.25%. Among them, the weekly operating rate of alumina in Shandong remained flat WoW at 92.11%; Shanxi's weekly operating rate increased by 2 percentage points WoW to 81.40%; Henan's weekly operating rate remained flat WoW at 70.00%; Guangxi's weekly operating rate remained flat WoW at 93.94%. During the period, the decline in alumina spot transaction prices continued to expand. In Henan, 25,000 mt was transacted during the period, with transaction prices ranging from 4,050 to 4,850 yuan/mt. As of Thursday, the latest transaction price was 4,050 yuan/mt, with a one-month payment term. In Guizhou, 4,000 mt of alumina spot was transacted, with transaction prices ranging from 4,600 to 4,950 yuan/mt. In Guangxi, 2,000 mt of alumina spot was transacted, with transaction prices at 4,980 yuan/mt. Additionally, aluminum plants in Xinjiang tendered for some alumina, with ex-factory prices reportedly around 4,500 yuan/mt. Aluminum plants in north-west China tendered for 5,000 mt of alumina spot, with delivery-to-factory prices at 3,975 yuan/mt, mainly sourced from Shanxi and Shandong. Aluminum plants in Qinghai procured 6,000 mt of alumina spot, sourced from Shandong and Shanxi, with ex-factory prices at 4,750 yuan/mt.
Overall:
This week, the weekly operating rate of alumina continued to increase slightly, with no significant changes on the demand side. Low-priced spot transactions were frequent in the market, and the decline was more pronounced than in the previous period. In Henan, the spot transaction price on Thursday was 4,050 yuan/mt, down 830 yuan/mt from last Thursday's transaction price of 4,880 yuan/mt. However, as of now, alumina capacity has not entered a large-scale loss state. It is expected that alumina supply will maintain a high operating rate in the short term, with the supply and demand fundamentals remaining in a slightly surplus state. Overall, alumina spot prices are expected to continue their downward trend in the short term. Close attention should be paid to bauxite transaction prices, alumina costs, and overseas alumina spot prices in the near future.
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