SHANGHAI, May 23 (SMM) - As of last Friday, the SMM weighted alumina index stood at 3,007 yuan/mt, down 7 yuan/mt or from a week ago. The prices inched lower in Shanxi and Henan, but remained stable in south-west China. The prices stood between 2,950-3,060 yuan/mt in Shandong, 3,020-3,120 yuan/mt in Henan, 2,930-2,960 yuan/mt in Shanxi, 2,960-3,040 yuan/mt in Guangxi, 3,000-3,050 yuan/mt in Guizhou, and 3,150-3,200 yuan/mt in Bayuquan.
Alumina prices FOB Western Australia fell to $362/mt as of last Friday, which was equivalent to 3,298 yuan/mt CIF China and 291 yuan/mt higher than the domestic spot prices. The ocean freight was $60/mt. The import window remained closed.
China’s alumina exports in April reached 167,700 mt, an increase of 1190% month-on-month and 1828% year-on-year, the highest since January 2019. Some market players predict that the exports will remain above 100,000 mt in May, and range between 60,000-100,000 mt per month in H2. If the strong export trend is maintained, the domestic surplus can be alleviated to a certain extent and the price decline will slow down.
Previously, alumina in Shanxi was piling up at refineries, social warehouses and railway stations as the pandemic hindered shipments. However, supply in north China began to increase after the transportation recovered, prompting some sellers to lower their offers so as to increase their cash flows, sending the prices in Shanxi down by 15 yuan/mt. As the supply of bauxite in Guizhou was still tight, some local refineries have begun to seek imported bauxite from ports or purchase domestic bauxite from other provinces, increasing their costs by nearly 100-200 yuan/mt. The alumina market in Guangxi maintained a tight balance amid stable production and growing demand from Yunnan, offering strong support to local alumina prices.
Wait-and-see sentiment emerged when alumina prices fell, but the price decline may slow down in the short term as exports in April exceeded expectations. In the long run, the supply surplus will continue to put pressure on market prices. SMM will keep a close eye on whether the high-cost alumina refineries Shanxi and Henan will be forced to reduce their production due to losses.
