SHANGHAI, Aug 15 (SMM) - Price review: The SMM weighted alumina index stood at 2,959 yuan/mt as of last Friday, down 10 yuan/mt from a week ago. The prices stood between 2,890-3,050 yuan/mt in Shandong (down 30 yuan/mt), 2,980-3,050 yuan/mt in Henan (down 5 yuan/mt), 2,880-2,930 yuan/mt in Shanxi (down 10 yuan/mt), 2,940-3,010 yuan/mt in Guangxi (down 5 yuan/mt), 2,870-2,940 yuan/mt in Guizhou (down 5 yuan/mt), and 3,000-3,050 yuan/mt in Bayuquan.

Overseas market: Alumina prices FOB Western Australia lost $4/mt from a week ago to $326/mt as of last Friday, which was equivalent to 2,913.8 yuan/mt CIF China and 44.7 yuan/mt lower than the domestic spot prices. The ocean freight stood at $46/mt. There were two deals last week. One deal for 30,000 mt of alumina was done at $326/mt FOB Western Australia on August 11, for shipment at the end of August. Another deal for 30,000 mt of alumina was done at $333/mt FOB Western Australia on August 12, for shipment in mid-September, and the destination was unknown. The overseas alumina prices rebounded shortly after falling below $330/mt, and are expected to fluctuate within a narrow range in the short term.

Domestic market: Transactions occurred in various regions last week, driving prices down slightly.

In north China, SMM survey found that one alumina refinery in Shanxi, which was expected to be cutting its output over environmental issues, remains in normal production. Even if this refinery decides to reduce or stop its production in the future, the supply shock will not be significant until next month. The amount of alumina available in the spot market has not been reduced significantly. Although sellers held their quotation firm, buyers have already begun to lower their purchase prices. The market is gradually tilted towards a buyer’s market. 

In south-west China, there was a transaction of 5,000 mt of alumina at 2,910 yuan/mt. With the continuous release of new capacity, there is still room for the local prices to fall, which will widen the price difference between the north and the south.

Price evolution: Pessimism has resurfaced in the alumina market. Luyu Bochuang is scheduled to put its Phase II alumina project into (1 million mt/year) operation in September, which will reach full capacity in October. If the output reduction in Shanxi is smaller than expected, concerns over severe oversupply will weigh on alumina prices.