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[SMM brief Analysis] the height of alumina stabilizing and rebounding remains to be seen.
Apr 19,2020 15:26CST
translation
Source:SMM
SMM4, March 19, electrolytic aluminum prices rose more than 500 yuan / ton this week, superimposed domestic alumina prices have reached a low of nearly 3 years, electrolytic aluminum plant cash flow tends to be loose in the short term, the willingness to purchase raw materials, at the same time, alumina plants and holder traders spot inventory pressure is small, the willingness to raise prices.
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SMM4, March 19, electrolytic aluminum prices rose more than 500yuan / ton this week, superimposed domestic alumina prices have reached a low of nearly three years, electrolytic aluminum plant cash flow tends to be loose in the short term, the willingness to purchase raw materials, at the same time alumina plants and holder traders spot inventory pressure is small, the willingness to raise prices is enhanced.

Figure 1. Price trend of Alumina in four places

Source: SMM

The weighted price of SMM alumina in the region on Friday was 2064 yuan / ton, down 57 yuan / ton from the previous Friday. Prices maintained a downward trend in the first half of the week, but starting on Wednesday, market inquiries increased, holders increased willingness to bid, and market price performance bottomed out. As of Friday, the price of SMM alumina in Shanxi, Henan, Shandong, Guangxi and Guizhou was around 2050 yuan / ton, 2075 yuan / ton, 2065 yuan / ton, 2050 yuan / ton and 2060-2090 yuan / ton, respectively.

On the cost side, the prices of Shanxi and Henan domestic ores and caustic soda have not stopped falling; on the supply side, the operating capacity of alumina is basically the same as that of the previous week, but as we mentioned in the previous report, the operating capacity of alumina in Shanxi, Henan, Chongqing and Guizhou has basically entered the stage of comprehensive cash flow. If future prices force the loss cycle to continue, the area of production reduction may be further expanded. On the demand side, short-term electrolytic aluminum plants and traders procurement demand has risen, helping alumina to stop falling. Therefore, on the future, it is expected that in the short term under the support of rising electrolytic aluminum prices and alumina production reduction expectations, alumina spot prices will also record a certain rebound, but the height of the rebound will be restrained by the downward movement of costs.

Figure 2. Price trend of domestic and imported alumina

Source: SMM

(SMM Li Hao 021-5166 6863)

An epidemic disrupts the pace of production and operation in the aluminum industry. After the end of the epidemic, will the industry usher in explosive growth? will the downstream demand of aluminum rebound with the recovery of the industry? will the balance of supply and demand in the aluminum market change as a result of the epidemic in 2020? how will the trend of aluminum prices evolve in the future? Welcome to the "2020 (15th) China International Aluminum processing Summit" to discuss your concerns with industry experts, corporate bigwigs, industry elites and SMM senior analysts. In addition, this epidemic situation has suppressed the operation of enterprises, and the development of the industry needs to be warmed up by everyone. SMM provides a professional circle for everyone and invites customers upstream and downstream of the industrial chain to gather together. I also hope that it can provide opportunities for the market expansion of enterprises, the establishment of contacts, and the excavation of business opportunities, sharpen the way forward, and counter-attack to win!

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