Weekly Port Arrivals of Bauxite Rise Again, Spot Alumina Prices May Continue Downward Trend [SMM Morning Comment on Alumina]

Published: Jan 8, 2025 09:16

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SMM Morning Comment on Alumina: Recently, the weekly operating rate of alumina has rebounded slightly, and alumina supply has increased slightly. With the technological transformation and production cuts at aluminum smelters in Guangxi, Sichuan, and other regions, alumina demand has slightly decreased, and the previously tight alumina supply has improved compared to earlier periods. By the end of December, the alumina raw material inventory at aluminum smelters had rebounded slightly, while downstream restocking and purchasing enthusiasm weakened. The acceptance of high-priced spot alumina decreased, and with reports of some low-priced transactions, suppliers showed an increased willingness to sell. In the short term, spot alumina prices are likely to maintain a slight downward trend.

SMM Alumina Morning Comment 1.8

Futures Market: During the night session, the most-traded alumina 2502 futures contract opened at 4,278 yuan/mt, reached a high of 4,308 yuan/mt, a low of 4,192 yuan/mt, and closed at 4,225 yuan/mt, down 74 yuan/mt or 1.71%, with an open interest of 109,000 lots.

Industry Dynamics:

According to data on January 3, the weekly port arrivals of domestic bauxite totaled 4.3682 million mt, an increase of 708,200 mt from the previous week. The weekly port departures of bauxite from Guinea's main ports totaled 3.6238 million mt, an increase of 423,200 mt from the previous week. The weekly port departures of bauxite from Australia's main ports totaled 567,900 mt, a decrease of 612,800 mt from the previous week.

Spot-Futures Price Spread Daily Report: According to SMM data, as of 11:30 on January 7, the SMM alumina index showed a premium of 1,295 yuan/mt against the most-traded contract's latest transaction price.

Warehouse Warrant Daily Report: On January 7, the total registered warehouse warrants for alumina increased by 3,016 mt from the previous trading day to 15,300 mt. The total registered warehouse warrants for alumina in Shandong remained unchanged at 0 mt, in Henan remained unchanged at 0 mt, in Guangxi remained unchanged at 301 mt, in Gansu remained unchanged at 0 mt, and in Xinjiang increased by 3,016 mt to 15,000 mt compared to the previous trading day.

Overseas Market: As of January 7, the FOB Western Australia alumina price was $681/mt, with an ocean freight rate of $22.45/mt. The USD/CNY exchange rate selling price was around 7.35. This price, converted to the domestic main ports' external selling price, was approximately 5,919 yuan/mt, 355 yuan/mt higher than domestic alumina prices. The alumina import window remains closed.

Summary: Recently, the weekly operating rate of alumina has rebounded slightly, and alumina supply has increased slightly. With the technological transformation and production cuts in aluminum smelters in Guangxi, Sichuan, and other regions, alumina demand has slightly declined. The tight alumina supply situation has improved compared to earlier periods. As of the end of December, alumina raw material inventories at aluminum smelters have rebounded slightly, and downstream restocking and purchasing enthusiasm have weakened. The acceptance of high-priced spot alumina has decreased. With reports of some low-price transactions, suppliers' willingness to sell has increased. In the short term, spot alumina prices may continue to trend slightly lower.

[The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make cautious decisions and not substitute this for independent judgment. Any decisions made by clients are unrelated to SMM.]

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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