SHANGHAI, Jan 15 (SMM)－ SMM believes alumina prices are likely to rally ahead of the Chinese New Year holiday in mid-February to just below 3,000 yuan/mt before downward pressure returns.
Shandong Weiqiao has started to execute its long-term contracts since the beginning of this year, leading to less pressure on alumina inventory. Traders in Shanxi also saw their stocks level come down while alumina producers in the region raised their offers.
More enquiries were heard from aluminium producers in northwest China over the past couple of weeks as they looked to replenish some alumina, SMM understood. Some smelters were keen to bring forward their procurement as prices go up.
In the south, Guangxi Huayin Aluminium is set to see its monthly alumina production down 80,000 mt due to short supply of raw materials. This means alumina prices are unlikely to trade lower.
The average price of Chinese domestic alumina in four major regions stood at 2,850 yuan/mt earlier this month, down 23.6% from 3,730 yuan/mt in November, according to SMM data.
The drop was mainly led by a slump in aluminium ingot price, sellers’ willingness to cut offers due to decent profits, and lower bauxite and caustic soda prices.
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