SMM Morning Comment: Alumina Prices May Decline Further Amid Mixed Supply-Demand Dynamics

[SMM Morning Comment on Alumina: Mine Quotations Lowered, Alumina May Continue to Decline]

Supply side, some alumina refineries in northern regions reported maintenance this week, which may slightly impact alumina supply in the short term. Weekly operating rates of alumina decreased by 0.33 percentage points this week. Demand side, some aluminum production capacity in Sichuan and other regions undergoing technological transformation may gradually resume production, leading to an increase in alumina demand. Cost side, due to the sharp decline in spot alumina prices, alumina refineries have significantly reduced their acceptance of high-priced bauxite. Quotations from bauxite holders have also decreased, and imported bauxite prices have fallen, potentially lowering alumina production costs. However, the current spot transaction prices of alumina in northern regions are below the theoretical marginal production cost. Overall, large-scale production cuts in alumina have not yet occurred, and the spot alumina market remains relatively ample in supply. Spot transaction prices continue to decline and may extend the downward trend in the short term.