SMM Expects Alumina Imports to Drop Further in March Following a Slump in January-February

SHANGHAI, Mar 25 (SMM) - Customs data showed that China exported 4,200 mt of alumina in January 2022. The imports were 212,900 mt, down 16.58% MoM and 35.67% YoY. The net imports were 208,700 mt.

China exported 3,800 mt of alumina in February 2022. The imports were 201,100 mt, down 5.57% MoM, but up 28.18% YoY. The net imports were 197,300 mt.

The import volume in January and February was basically in line with previous expectations.

The import window was open for most of the time from January 4 to February 17 , and the inflow of imported alumina was within a reasonable range. It is worth noting that the imports Indonesia far exceeded those from Australia in February, making Indonesia the top supplier to China. Nanshan's alumina refinery in Indonesia was producing smoothly and sold a batch of alumina to a large trader in China, which boosted the overall imports from Indonesia. Some market participants expressed that Indonesia’s bauxite export ban will contribute to the outflows of alumina from the country to China.   

Since February 18, the alumina import window has been closed. The current price difference between China and overseas has expanded to around 1,500 yuan/mt, hence the export window has been opened. As of March 24, the average price of SMM domestic alumina weighted index was 2,970 yuan/mt, and the average price of SMM alumina FOB Western Australia was $535/mt, equivalent to 4,467 yuan/mt CIF mainstream ports in China. Overseas alumina prices have soared 41.5% from early February. The risk of overseas production cuts still exists, and the overseas market tends to be in short supply. At present, Rusal's Nikolaev alumina refinery in Ukraine has been shut down. The refinery has a capacity of 1.77 million mt. In order to ensure the stable operation of highly profitable aluminum smelters, Rusal may seek alumina from neighboring countries amid the escalation of sanctions. As a major alumina producer, China’s tremendous alumina capacity may make up for the alumina supply gap of Rusal and even overseas.

Considering that the domestic new alumina capacity has not yet been released on a large scale and the pandemic has disrupted the shipments in some areas, only 100,000-150,000 mt of alumina may be available for exports in March. As the import window is closed, it is expected that only alumina under long-term orders will flow into China. The import volume may fall to 50,000-100,000 mt in March.

Disclaimer:

The above representation and data is based on market information SMM believes to be reliable at the time of acquiring as well as the comprehensive assessment by SMM research team, and any and all information provided in this article is for reference only. This article does not constitute a direct recommendation for investment or any decisions in any form and clients shall act on their own discreet and any decisions made by clients are not within the responsibility of SMM.