Domestic Spot Alumina Transaction Prices Continue to Decline; Southwest Aluminum Gradually Resumes Production, Demand May Rebound Slightly [SMM Morning Comment on Alumina]

SMM February 10

Futures Market: During the night session, the most-traded alumina 2505 futures contract opened at 3,473 yuan/mt, reached a high of 3,522 yuan/mt, a low of 3,471 yuan/mt, and closed at 3,498 yuan/mt, up 6 yuan/mt or 0.18%, with an open interest of 132,000 lots.

Spot Alumina Transactions: On Friday, 3,000 mt of spot alumina were traded in Guizhou at a transaction price of 3,700 yuan/mt. In north-west China, aluminum smelters purchased 10,000 mt of spot alumina at a delivered price of 3,525 yuan/mt, sourced from Shanxi, Henan, and Shandong.

Industry Dynamics:

1. According to SMM statistics on February 7, bauxite inventory at nine domestic ports totaled 14.71 million mt, an increase of 760,000 mt from the previous week.
2. According to SMM statistics on February 7, alumina inventory at domestic ports totaled 2,300 mt, a decrease of 7,200 mt from the week before the holiday.

Spot-Futures Price Spread Daily Report: According to SMM data, as of 11:30 am on February 7, the SMM alumina index showed a premium of 188 yuan/mt against the most-traded contract's latest transaction price.

Warehouse Warrant Daily Report: On February 7, the total registered warehouse warrants for alumina increased by 4,805 mt from the previous trading day to 30,100 mt. In Shandong, the total registered warehouse warrants remained unchanged at 2,410 mt; in Henan, they remained unchanged at 6,604 mt; in Guangxi, they remained at 0; in Gansu, they remained at 0 mt; and in Xinjiang, they increased by 4,805 mt to 21,000 mt.

Overseas Market: As of February 7, the FOB Western Australia alumina price was $531/mt, with an ocean freight rate of $19.30/mt. The USD/CNY exchange rate sell price was around 7.31. This price translates to an approximate selling price of 4,624 yuan/mt at major domestic ports, which is 936 yuan/mt higher than domestic alumina prices, keeping the alumina import window closed.

Summary: Overall, in the short term, alumina operating capacity is expected to continue increasing, and the spot alumina market remains relatively loose compared to earlier periods, with spot transaction prices continuing to decline. In the short term, there are no clear expectations for alumina production cuts, and supply remains stable. However, some aluminum production cuts or technological transformation capacities in south-west China may gradually resume production, leading to a slight rebound in demand. Nevertheless, this is unlikely to reverse the relatively loose supply situation in the spot alumina market. Moving forward, attention should be paid to bauxite prices and supply conditions.

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