Overseas Alumina Transaction Prices Stabilize, Alumina Spot-Futures Price Spread Narrows to Within 100 Yuan [SMM Morning Comment on Alumina]

Published: Feb 12, 2025 09:07

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SMM Morning Comment on Alumina: Overall, in the short term, alumina operating capacity is expected to continue increasing, and the spot market for alumina remains relatively loose compared to earlier periods. Domestic alumina prices continue to decline, while overseas spot alumina transaction prices have stabilized. Model calculations show that imported alumina losses exceed 1,000 yuan, and the domestic alumina export window may gradually open. In the short term, there are no clear expectations for production cuts in alumina, and supply remains unchanged. Some aluminum production cuts or technological transformation capacities in south-west China may gradually resume production, with demand rebounding slightly. However, this is unlikely to reverse the relatively loose supply pattern in the alumina spot market. Moving forward, attention should be paid to domestic alumina exports, bauxite prices, and supply conditions.

SMM Alumina Morning Comment on February 12

Futures Market: During the night session, the most-traded alumina 2505 contract opened at 3,445 yuan/mt, with a high of 3,457 yuan/mt and a low of 3,435 yuan/mt, eventually closing at 3,449 yuan/mt, down by 10 yuan/mt or 0.30%. Open interest stood at 143,000 lots.

Industry Dynamics:

Overseas Alumina Transactions: On February 11, 30,000 mt of alumina was traded overseas at a transaction price of $538/mt FOB Western Australia or $534/mt FOB Eastern Australia, with shipment scheduled for late March.
Trump Signs Executive Order to Impose 25% Tariffs on All Steel and Aluminum Imports to the US: On February 10 local time, US President Donald Trump signed an executive order announcing a 25% tariff on all steel and aluminum imports to the US. Trump also stated that the requirements would have "no exceptions or exemptions." Additionally, he mentioned considering tariffs on automobiles, chips, and pharmaceuticals.

Spot-Futures Price Spread Daily Report: According to SMM data, as of 11:30 a.m. on February 11, the SMM Alumina Index showed a premium of 52 yuan/mt against the most-traded contract's latest transaction price.

Warehouse Warrant Daily Report: On February 11, the total registered warehouse warrants for alumina remained unchanged from the previous trading day at 28,200 mt. By region, Shandong's total registered warehouse warrants remained unchanged at 2,410 mt, Henan's at 601 mt, Guangxi's at 0 mt, Gansu's at 0 mt, and Xinjiang's at 25,200 mt.

Overseas Market: As of February 11, the FOB Western Australia alumina price was $531/mt, with an ocean freight rate of $19.30/mt. The USD/CNY exchange rate sell price was around 7.33, translating to an external selling price of approximately 4,635 yuan/mt at major domestic ports, which is 1,137 yuan/mt higher than domestic alumina prices. The alumina import window remains closed.

Summary: Overall, in the short term, alumina operating capacity continues to increase, and the alumina spot market supply is relatively ample compared to earlier periods. Domestic alumina prices continue to decline, while overseas alumina spot transaction prices have stabilized. Model calculations show that importing alumina results in losses exceeding 1,000 yuan/mt. The domestic alumina export window may gradually open. In the short term, there are no clear expectations for alumina production cuts, and supply remains unchanged. Some aluminum production cuts or technological transformation capacities in south-west China may gradually resume production, with demand slightly rebounding. However, this is unlikely to reverse the relatively ample supply in the alumina spot market. Further attention should be paid to domestic alumina exports, bauxite prices, and supply conditions.

[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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