Output Cuts but Supply Remains Loose Alumina Prices May Continue to Face Pressure [SMM Alumina Weekly Review]

SMM March 20 Update: Price Review: As of Thursday, the SMM regional weighted index was 3,325 yuan/mt, down 56 yuan/mt WoW. Among them, Shandong region was quoted at 3,100-3,180 yuan/mt, down 170 yuan/mt WoW; Henan region was quoted at 3,180-3,220 yuan/mt, down 110 yuan/mt WoW; Shanxi region was quoted at 3,140-3,200 yuan/mt, down 120 yuan/mt WoW; Guangxi region was quoted at 3,150-3,250 yuan/mt, down 190 yuan/mt WoW; Guizhou region was quoted at 3,230-3,270 yuan/mt, down 140 yuan/mt WoW; Bayuquan region was quoted at 3,710-3,790 yuan/mt. Overseas Market: As of March 20, 2025, FOB Western Australia alumina price was $425/mt, with an ocean freight rate of $20.55/mt, and the USD/CNY exchange rate selling price was around 7.25. This price translates to approximately 3,731 yuan/mt for domestic mainstream port selling prices, which is 549 yuan/mt higher than domestic alumina prices, keeping the alumina import window closed. This week, overseas spot alumina trading was sluggish, with one new transaction recorded: on March 20, 40,000 mt of alumina was traded at $409/mt FOB Kendawangan, Indonesia, with a shipment date in late April. Export: Based on the latest spot alumina transaction prices in Shandong, the export cost of domestic alumina is about $455/mt, higher than the overseas spot alumina price, keeping the export window closed. Domestic Market: According to SMM data, as of Thursday, the total built capacity of metallurgical-grade alumina nationwide was 105.02 million mt, with operating capacity at 88.01 million mt. The national weekly operating rate of alumina decreased by 0.24 percentage points to 83.80%. Specifically, the weekly operating rate in Shandong remained unchanged at 91.13%; in Shanxi, it decreased by 2 percentage points to 74.66%; in Henan, it remained unchanged at 67.62%; in Guangxi, it increased by 1.51 percentage points to 91.28%. During the period, spot alumina trading was relatively sluggish. Aluminum plants in Xinjiang tendered for some alumina, with delivery-to-factory prices around 3,450 yuan/mt; some spot alumina transactions were made in northern Shanxi and Shandong, with ex-factory prices at 3,100 yuan/mt; 5,000 mt of alumina was traded in Guizhou, with ex-factory prices at 3,250 yuan/mt; and three spot alumina transactions were recorded in south-west China, with a total volume of 6,000 mt, and transaction prices at 3,310 yuan/mt (delivery-to-factory), 3,240 yuan/mt (delivery-to-factory), and 3,150 yuan/mt (ex-factory). Overall: Recently, the weekly operating rate of alumina has slightly decreased, with the national total operating capacity of metallurgical alumina reduced to 88.01 million mt/year, but the reduction is limited. According to SMM data, as of Thursday, the total operating capacity of domestic aluminum was 43.84 million mt/year, translating to an alumina demand capacity of around 84.4 million mt/year. Even considering net alumina exports, the fundamentals still indicate a supply surplus. In the futures market, as of Thursday, the most-traded alumina futures contract fell below 3,000 yuan/mt, leading to a growing fear of further declines, cautious inquiries, and purchases, with the center of a small amount of spot and warrant transaction prices continuing to shift downward. In the short term, alumina prices are expected to remain under pressure. Subsequent attention should be paid to changes in alumina operating capacity. Source: SMM 》Click to view the SMM aluminum industry chain database