Weekly Alumina Operating Rate Rises Again; Spot Alumina Prices May Continue Downward Trend in the Short Term [SMM Morning Comment on Alumina]

SMM Morning Comment on Alumina 1.10

Futures Market: During the overnight session, the most-traded alumina 2502 futures contract opened at 4,130 yuan/mt, with a high of 4,130 yuan/mt and a low of 4,059 yuan/mt, and finally closed at 4,105 yuan/mt, up 21 yuan/mt or 0.52%. Open interest stood at 97,900 lots.

Spot Market: Yesterday, 2,000 mt of spot alumina were transacted in Henan at an ex-factory price of 4,880 yuan/mt.

Industry Dynamics:
(1) According to SMM, starting January 9, a major alumina refinery in Shandong adjusted its purchase price for 32% ion membrane liquid caustic soda, increasing it by 20 yuan/mt from 770 yuan/mt to 790 yuan/mt under the two-invoice system (equivalent to 2,469 yuan/mt on a 100% basis).
(2) According to SMM data, as of this Thursday, the national weekly operating rate of alumina increased by 0.49 percentage points WoW to 86.27%. Among them, the weekly operating rate in Shandong remained flat WoW at 92.11%; in Shanxi, it rose by 2 percentage points WoW to 79.40%; in Henan, it remained flat WoW at 70.00%; and in Guangxi, it remained flat WoW at 93.93%.
(3) Overseas Alumina Transactions: On January 8, 25,000 mt of alumina were transacted overseas at a price of $650/mt FOB Go Dau, Vietnam, for shipment in late February.

Spot-Futures Price Spread Daily Report: According to SMM data, on January 9, the SMM Alumina Index showed a premium of 1,342 yuan/mt against the most-traded contract's latest transaction price at 11:30.

Warehouse Warrant Daily Report: On January 9, the total registered warehouse warrants for alumina remained unchanged from the previous trading day at 15,300 mt. In Shandong, Henan, and Gansu, the total registered warehouse warrants remained at 0 mt; in Guangxi, they remained at 301 mt; and in Xinjiang, they remained at 15,000 mt.

Overseas Market: As of January 9, the FOB Western Australia alumina price was $681/mt, with an ocean freight rate of $21.9/mt. The USD/CNY exchange rate sell price was around 7.35, translating to an external selling price of approximately 5,919 yuan/mt at major domestic ports, which is 511 yuan/mt higher than domestic alumina prices. The alumina import window remains closed.

Summary: This week, the weekly operating rate of alumina continued to rise slightly, while demand remained relatively stable. With low-price transactions gradually emerging in the market, some suppliers became more active in selling, leading to an increase in the availability of spot alumina. Spot transactions saw a wider discount to the index price. In the short term, some alumina capacity in Shanxi is expected to resume production, increasing supply. On the demand side, aluminum operating rates remain relatively stable. The alumina market is expected to maintain a slight surplus in fundamentals, and spot alumina prices may continue their downward trend in the short term.

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