Domestic and Overseas Spot Alumina Prices Both Decline, Domestic Alumina Operating Rate Continues to Slightly Increase [SMM Morning Comment on Alumina]

SMM Morning Comment on Alumina 1.20

Futures Market: During the night session, the most-traded alumina 2502 futures contract opened at 3,884 yuan/mt, with a high of 3,950 yuan/mt and a low of 3,824 yuan/mt, eventually closing at 3,854 yuan/mt, up 88 yuan/mt or 2.33%. Open interest stood at 78,200 lots.

Industry Dynamics:

1. Overseas Alumina Transactions: On January 17, 30,000 mt of alumina was transacted overseas at a price of $570.01/mt FOB Gladstone, Australia, with shipment scheduled for late February.
2. According to SMM, starting January 18, a major alumina refinery in Shandong adjusted its purchase price for 32% ion membrane liquid caustic soda, increasing it by 20 yuan/mt from the previous 870 yuan/mt to 890 yuan/mt ex-factory under the two-invoice system (equivalent to a price of approximately 2,781 yuan/mt on a 100% basis).
3. According to SMM statistics on January 17, domestic port alumina inventory totaled 25,000 mt, an increase of 5,000 mt WoW.
4. According to SMM statistics on January 17, bauxite inventory at nine domestic ports totaled 14.34 million mt, an increase of 110,000 mt WoW.

Spot-Futures Price Spread Daily Report: According to SMM data, on January 17, the SMM Alumina Index showed a premium of 839 yuan/mt against the most-traded contract's latest transaction price at 11:30.

Warehouse Warrant Daily Report: On January 17, the total registered warehouse warrants for alumina remained unchanged from the previous trading day at 43,200 mt. In Shandong, the total registered warehouse warrants for alumina remained unchanged at 901 mt; in Henan, at 12,000 mt; in Guangxi, at 0 mt; in Gansu, at 0 mt; and in Xinjiang, at 30,300 mt.

Overseas Market: As of January 17, the FOB Western Australia alumina price was $610/mt, with an ocean freight rate of $20.9/mt. The USD/CNY exchange rate sell price was around 7.35, translating to an external selling price of approximately 5,318 yuan/mt at major domestic ports, which was 810 yuan/mt higher than domestic alumina prices. The alumina import window remained closed.

Summary: Recently, the weekly operating rate of alumina has continued to increase slightly, while demand has shown no significant changes. Low-priced spot transactions have been frequent in the market, with a larger decline compared to earlier periods. In Henan, spot transaction prices on Thursday this week were 4,050 yuan/mt, down 830 yuan/mt from 4,880 yuan/mt last Thursday. However, as of now, alumina capacity has not entered a large-scale loss-making state. In the short term, alumina supply is expected to maintain a high operating rate, with a slight surplus in the supply-demand fundamentals. Overall, spot alumina prices are expected to continue their downward trend in the short term. Close attention should be paid to bauxite transaction prices, alumina costs, and overseas spot alumina prices in the near term.

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