Aluminum price exceeded 20,000 yuan/mt. Is there still upside room for alumina prices?[SMM analysis]

On April 13, the US and the UK announced new trading restrictions on Russian aluminum, copper and nickel. The new rules prohibit the London Metal Exchange (LME) and the Chicago Mercantile Exchange (CME) from accepting newly produced Russian metals, including Russian aluminum, copper and nickel produced on or after April 13. LME also issued trading guidelines for Russian metals after being sanctioned by the UK. At the morning session on April 15, domestic and overseas aluminum prices rose rapidly, with three-month LME aluminum jumping to $2,728/mt, a record high. The most-traded SHFE 2306 contract also climbed to a high of 21,345 yuan/mt.
According to SMM's statistics, alumina prices account for 39.46% of aluminum cost. The aluminum price exceeded 20,000 yuan/mt. Most aluminum smelters have high and stable profits, and accepted high alumina prices. However, in the next month, aluminum smelters will still have stable long-term orders of alumina for production. The market remains cautious about high alumina prices.
According to SMM data, the overall trend of alumina prices was similar over aluminum prices in the past year, but the fluctuation of alumina prices lag behind. The current rapid rise in aluminum prices has not yet led to a significant increase in spot alumina prices, but it provided a certain impetus for its rebound. We need to continue to pay attention to the trend of aluminum prices. If aluminum prices fall from their high levels, it will put certain pressure on alumina prices. Otherwise, alumina prices may swing on a strong note.
On fundamentals, the tight balance of alumina has not changed, and prices will fluctuate at a high level in the short term at around 3,290-3,320 yuan/ton.