Spot Alumina Transaction Prices in Northern Regions Continue to Narrow Decline; Spread Between Futures and Spot Prices Continues to Narrow [SMM Morning Comment on Alumina]

Published: Jan 23, 2025 09:10

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SMM Morning Comment on Alumina: Recently, the weekly operating rate of alumina has continued to increase slightly, with no significant changes on the demand side. The price center of recent spot alumina transaction prices remains on a downward trend, though the decline has narrowed compared to earlier periods. As of now, alumina capacity has not entered a large-scale loss-making state. It is expected that the short-term operating rate of alumina will remain high, with the supply and demand fundamentals maintaining a slight surplus. 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.

SMM Morning Comment on Alumina 1.23

Futures Market: During the night session, the most-traded alumina 2502 futures contract opened at 3,800 yuan/mt, with a high of 3,806 yuan/mt and a low of 3,772 yuan/mt, closing at 3,784 yuan/mt, down 17 yuan/mt or 0.43%. Open interest stood at 48,700 lots.

Spot Alumina Transactions: In Henan, 7,000 mt of spot alumina were transacted at a price range of 3,880-3,900 yuan/mt.

Spot-Futures Price Spread Daily Report: According to SMM data, as of 11:30 on January 22, the SMM alumina index showed a premium of 392 yuan/mt against the latest transaction price of the most-traded contract.

Warehouse Warrant Daily Report: On January 22, the total registered warehouse warrants for alumina decreased by 902 mt from the previous trading day to 37,900 mt. In Shandong, the total registered warehouse warrants remained unchanged at 901 mt; in Henan, unchanged at 12,000 mt; in Guangxi, unchanged at 0; in Gansu, unchanged at 0 mt; and in Xinjiang, decreased by 902 mt to 25,000 mt.

Overseas Market: As of January 22, the FOB Western Australia alumina price was $573/mt, with an ocean freight rate of $20.9/mt. The USD/CNY exchange rate selling price was around 7.29. This price translates to an approximate selling price of 4,973 yuan/mt at major domestic ports, which is 778 yuan/mt higher than domestic alumina prices. The alumina import window remains closed.

Summary: Recently, the weekly operating rate of alumina has continued to increase slightly, while there has been no significant change on the demand side. The price center of recent spot alumina transactions continues to decline, but the rate of decline has narrowed compared to earlier periods. As of now, alumina capacity has not entered a large-scale loss-making state. In the short term, alumina operating rates are expected to remain high, with the supply and demand fundamentals maintaining a slight surplus. 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.

[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.]

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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