Export Window Closes, Alumina Prices Under Pressure [SMM Alumina Morning Comment]

SMM Alumina Morning Comment on March 5

In the overnight session, the most-traded alumina 2505 futures contract opened at 3,330 yuan/mt, reached a high of 3,337 yuan/mt and a low of 3,302 yuan/mt, and finally closed at 3,313 yuan/mt, down 0.51%. Open interest increased by 73,860 lots to 183,000 lots. Regarding spot alumina prices, on March 4, SMM alumina was quoted at 3,381 yuan/mt, flat compared to the previous trading day.

Ore Market: As of March 4, the SMM imported bauxite index stood at $95.11/mt, unchanged from the previous trading day. The SMM Guinea bauxite CIF average price was $93/mt, and the SMM Australian bauxite CIF average price was $91/mt, both unchanged from the previous trading day.

Industry News:

1. In January, South32's Mozal smelter in Mozambique experienced a temporary 3% reduction in aluminum production capacity due to domestic unrest. Although emergency measures alleviated raw material inventory issues, South32 temporarily withdrew its full-year production guidance for Mozal due to uncertainties. In February, South32 released its FY25 H1 report, reinstating production guidance for the smelter, with FY25 (July 1, 2025–June 30, 2026) share production expected at 350,000 mt, down 10,000 mt from the initial guidance (South32 holds a 63.7% stake).

2. Rio Tinto's New Zealand Aluminum Smelters (NZAS) agreed to delay the restart of the Tiwai Point aluminum smelter until August 31 at the latest to ensure Meridian Energy can secure 50 MW of power supply during this winter.

3. Indonesia recently launched a new sovereign wealth fund, Daya Anagata Nusantara (Danantara), with an initial investment of $20 billion. The fund focuses on over 20 key projects, including bauxite, nickel, and copper processing, artificial intelligence, refining, renewable energy, and food production.

4. Arrow Minerals Limited is advancing its Niagara bauxite project in Guinea, with the first resource report expected in March and a mining scope study to be completed by June.

5. Yongtai Energy stated on March 3 via its investor interaction platform that its coal mines currently contain abundant bauxite resources, but no rare earth resource exploration has been conducted yet.

6. The Guangxi Investment Group Beihai Green Ecological Aluminum Project, a major project in Guangxi, is progressing steadily. The overall progress of Phase I has reached 75%, with the calcination and dissolution-settling processes for aluminum hydroxide exceeding 90%. The project is expected to be completed and put into operation in Q3, 30 days ahead of schedule, with major processes entering individual trial runs soon. Meanwhile, the supporting Berth 19 terminal project has reached 95% completion, with dredging works totaling 3.09 million m³, achieving 90% of the total dredging volume. The terminal is expected to be operational by July.

Spot-Futures Price Spread Daily Report: According to SMM data, on March 4, the SMM alumina index showed a premium of 57 yuan/mt against the most-traded contract's latest transaction price at 11:30.

Warehouse Warrant Daily Report: On March 4, the total registered warehouse warrants for alumina increased by 18,317 mt from the previous trading day to 143,800 mt. In Shandong, the total registered warehouse warrants remained unchanged at 4,513 mt. In Henan, they decreased by 1,800 mt to 16,800 mt. In Guangxi, they increased by 20,117 mt to 20,117 mt. In Gansu, they remained unchanged at 6,616 mt. In Xinjiang, they also remained unchanged at 9.58 mt.

Overseas Market: As of March 4, the FOB Western Australia alumina price was $472/mt, with ocean freight at $19.75/mt. The USD/CNY exchange rate selling price was around 7.30, translating to an external selling price of approximately 4,137 yuan/mt at major domestic ports, 756 yuan/mt higher than domestic alumina prices. The alumina import window remains closed.

Summary: Recently, domestic spot alumina prices have stabilized, mainly due to increased export and delivery warehouse demand, which has supported alumina prices. In the short term, spot alumina prices in some regions have rebounded slightly. However, overseas alumina prices have declined, and the export window remains largely closed. Delivery warehouse demand is not sustainable, and the market expects some new alumina capacity to be gradually commissioned. In the medium and long term, spot alumina prices remain under pressure. In the short term, spot alumina prices may enter a phase of fluctuation and adjustment. Continuous attention should be paid to alumina export profitability and bauxite price changes.

[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.]