The Total Registered Volume of Alumina Warehouse Warrants Increases, and Spot Alumina Prices May Fluctuate Downward in the Short Term [SMM Morning Comment on Alumina]

SMM Morning Comment on Alumina for March 10

Futures Market: During the overnight session, the most-traded alumina 2505 futures contract opened at 3,267 yuan/mt, reached a high of 3,280 yuan/mt, a low of 3,238 yuan/mt, and closed at 3,240 yuan/mt, down by 37 yuan/mt or 1.14%, with an open interest of 196,000 lots.

Ore Market:

1. As of March 7, the SMM imported bauxite index stood at $95.14/mt, down by $0.01/mt from the previous trading day, mainly due to a decline in the USD/CNY exchange rate. The SMM CIF average price for Guinean bauxite was $93/mt, unchanged from the previous trading day, while the SMM CIF average price for Australian bauxite was $91/mt, also unchanged.
2. According to data from March 7, the weekly total arrivals of bauxite at domestic ports were 3.889 million mt, down by 681,400 mt from the previous week. The weekly total departures of bauxite from Guinea's main ports were 3.2182 million mt, down by 898,500 mt from the previous week. The weekly total departures of bauxite from Australia's main ports were 836,200 mt, down by 39,200 mt from the previous week.

Industry News:

1. The government of Binh Phuoc Province in Vietnam has approved an alumina production project with a total investment of approximately VND 22.8 trillion ($911 million). The project is expected to have an annual capacity of 2 million mt, with an operational period of 30 years and a construction period of 5 years. The project, invested by Binh Phuoc Ore Exploitation and Beneficiation JSC, is required to adopt environmental protection technologies and take responsibility for land compensation, resettlement, and mine restoration.
2. On March 7, the US Department of Commerce confirmed that Chinese products such as disposable aluminum containers, trays, and lids were sold at unfairly low prices and received improper subsidies. It decided to impose anti-dumping duties ranging from 193.90% to 287.80% and countervailing duties of 317.85%. Additionally, it ruled that the duties could be applied retroactively for 90 days. The US International Trade Commission (USITC) will make a final determination on April 11, 2025, to confirm whether the imports have caused material injury to the US industry.
3. According to SMM statistics on March 7, the total bauxite inventory at nine domestic ports was 15.01 million mt, an increase of 450,000 mt from the previous week.
4. According to SMM statistics on March 6, the total alumina inventory at domestic ports was 43,000 mt, an increase of 15,000 mt from the previous week.

Spot-Futures Price Spread Daily Report: According to SMM data, on March 7, the SMM alumina index showed a premium of 95 yuan/mt against the most-traded contract's latest transaction price at 11:30.

Warehouse Warrant Daily Report: On March 7, the total registered warehouse warrants for alumina increased by 17,759 mt to 170,900 mt compared to the previous trading day. In Shandong, the total registered warehouse warrants remained unchanged at 4,513 mt. In Henan, the total registered warehouse warrants decreased by 899 mt to 15,600 mt. In Guangxi, the total registered warehouse warrants remained unchanged at 20,100 mt. In Gansu, the total registered warehouse warrants increased by 2,113 mt to 9,927 mt. In Xinjiang, the total registered warehouse warrants increased by 16,500 mt to 120,700 mt.

Overseas Market: As of March 7, the FOB Western Australia alumina price was $472/mt, with an ocean freight rate of $20.05/mt. The USD/CNY exchange rate selling price was around 7.27. This price translates to an external selling price of approximately 4,120 yuan/mt at major domestic ports, which is 743 yuan/mt higher than domestic alumina prices. The alumina import window remains closed.

Summary: Recently, the tug-of-war between buyers and sellers in the alumina market has continued, with sluggish spot alumina transactions and stable spot prices. Overseas alumina transaction prices have further declined, and the domestic alumina export window remains closed, making it difficult for alumina exports to provide sustained demand. On the fundamentals side, no large-scale production cuts in alumina operating capacity have been reported, and the alumina market remains in a slight surplus. In the short term, spot alumina prices are expected to fluctuate downward.

[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.]