Alumina Prices in North China Rose Mildly on Cost Support

Published: Jul 25, 2022 10:24

Source: SMM

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SHANGHAI, Jul 25 (SMM) - As of last Friday, the SMM weighted alumina index stood at 2,967 yuan/mt.

SHANGHAI, Jul 25 (SMM) - As of last Friday, the SMM weighted alumina index stood at 2,967 yuan/mt. The alumina prices stood between 2,950-3,050 yuan/mt in Shandong, 2,980-3,070 yuan/mt in Henan, 2,880-2,930 yuan/mt in Shanxi, 2,950-3,010 yuan/mt in Guangxi, 2,880-2,960 yuan/mt in Guizhou, and 3,100-3,150 yuan/mt in Bayuquan. The prices in Shanxi gained 10 yuan/mt, making it the only region that saw a price increase.
Alumina prices FOB Western Australia slid just $1/mt from a week ago to $332/mt as of last Friday, which was equivalent to 3,032.8 yuan/mt CIF China and 65.8 yuan/mt higher than the domestic spot prices. The ocean freight was flat at $55/mt. With the continuous pullback of overseas prices, the price difference between the domestic and overseas markets has returned to a reasonable level.
There were only sporadic transactions in the domestic spot market. A deal for 10,000 mt of alumina was done at 2,930 yuan/mt (in cash, ex-factory) in Shanxi. Being plagued by high costs and losses, alumina refineries in north China are now focusing on deliveries under long-term orders while reducing their supply to the spot market. The quotations in Shanxi held firm between 2,950-3,050 yuan/mt, while the actual transaction prices were basically between 2,900-3,000 yuan/mt. No deals were heard in south-west China last week, and the local quotations were stable. The overall transactions were still mostly driven by rigid demand. Due to the uncertainty over future prices, traders maintained a wait-and-see attitude.
China exported 188,000 mt of alumina in May, which alleviated the domestic supply surplus to a certain extent and somehow eased the market pessimism. Under the support from costs, alumina prices are unlikely to fall sharply in the short term and may stabilise.

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