Overseas Alumina Prices Stayed High, While Domestic Prices Fell across the Board

SHANGHAI, Sep 26 (SMM) - Price review: The SMM weighted alumina index stood at 2,893 yuan/mt as of last Friday, down 28 yuan/mt from a week ago. The prices stood between 2,820-2,950 yuan/mt in Shandong (down 20 yuan/mt), 2,930-2,980 yuan/mt in Henan (down 45 yuan/mt), 2,800-2,880 yuan/mt in Shanxi (down 25 yuan/mt), 2,860-2,880 yuan/mt in Guangxi (down 50 yuan/mt), 2,850-2,910 yuan/mt in Guizhou (down 10 yuan/mt), and 3,000-3,050 yuan/mt in Bayuquan.

Overseas market: No deals were heard last week. Alumina prices FOB Western Australia were quoted at $358/mt as of last Friday, unchanged from a week ago, which was equivalent to 3,264 yuan/mt CIF China and 371 yuan/mt higher than the domestic average spot price. The ocean freight stood at $45/mt. The high overseas prices may boost alumina exports. 

Domestic market: Prices across the major alumina producing areas fell to varying degrees. High costs in north China failed to provide support to local alumina prices. One large alumina refinery in Shanxi is currently running just one production line and is likely to reduce its output further in the future.  The power supply in south-west China remained tight. Aluminium smelters in Yunnan have reduced their production by more than 10%, while the production resumptions of smelters in Sichuan have been slow, causing alumina demand in south-west China to continue to decline. Alumina prices in Guangxi kept falling amid excess supply.

Price evolution: One large alumina refinery in Shanxi has slashed its output, while another refinery in Chongqing plans to follow suit before October. However, the market sentiment remains bearish as the decline in demand has outpaced the drop in supply. Alumina prices will remain in the downward trajectory in the short term.