Alumina prices yet to bottom out amid production ramp-up

SHANGHAI, Jul 3 (SMM) – SMM believes that an anticipated ramp-up in new and resumed capacity is preventing alumina prices from bottoming out. 

Potential production cuts by alumina refiners, when prices fall to around 2,600 yuan/mt, will likely offer support but remains insufficient to boost prices significantly. The average price of alumina for the second half of the year is very likely to stand lower than that for the first half of the year.

Concentrated production resumptions dragged on alumina prices in June, from highs in May. While Xinfa’s Jiaokou plant yielded almost no output in June, resumed capacity across Luyu Bochuang and Bosai Shuijiang continued to release output. Maintenance at Guangxi Huayin ended, while Xinghua Technology returned to full capacity. Chalco Huaxing, Chalco Mining, East Hope’s Sanmenxia plant, Xing’an Chemical Industry and Guangxi Xinfa all recovered capacity to some extent.

SMM learned that offers of a low of 2,700 yuan/mt now could hardly attract buyers in the north. SMM assessments showed that alumina prices averaged 2,758 yuan/mt as of July 2, down 320 yuan/mt, or some 10% from early June.

Alumina refiners’ broader adoption of seaborne bauxite to ease ore supply tightness and greater alumina imports also added pressure to alumina prices.