Spot Alumina Activity Declines, Short-Term Prices Expected to Fluctuate [SMM Morning Comment on Alumina]

SMM Morning Comment on Alumina, 3.6

Futures market: During the night session, the most-traded alumina 2505 futures contract opened at 3,284 yuan/mt, reached a high of 3,292 yuan/mt and a low of 3,256 yuan/mt, and finally closed at 3,266 yuan/mt, down 0.55%. Open interest increased by 17,500 lots to 689,900 lots. Regarding spot alumina prices, on March 5, SMM alumina was quoted at 3,381 yuan/mt, unchanged from the previous trading day.

Ore: As of March 5, the SMM imported bauxite index was reported at $95.14/mt, up $0.03/mt from the previous trading day. The SMM Guinea bauxite CIF average price was $93/mt, unchanged from the previous trading day, while the SMM Australia bauxite CIF average price was $91/mt, also unchanged.

Industry Dynamics:

1. SMM learned that the long-term contract procurement price of 32% ion membrane liquid caustic soda by mainstream alumina refineries in Henan Province increased by 550 yuan/mt compared to January-February, with a delivery-to-factory price of 3,480-3,630 yuan/mt (converted to 100%).

Spot-Futures Price Spread Daily Report: According to SMM data, on March 5, the SMM alumina index showed a premium of 102 yuan/mt against the most-traded contract's latest transaction price at 11:30.

Warehouse Warrant Daily Report: On March 5, the total registered warehouse warrant volume for alumina increased by 8,106 mt from the previous trading day to 151,900 mt. In Shandong, the total registered warehouse warrant volume remained unchanged at 4,513 mt. In Henan, the total registered warehouse warrant volume increased by 3,600 mt to 20,400 mt. In Guangxi, the total registered warehouse warrant volume remained unchanged at 20,117 mt. In Gansu, the total registered warehouse warrant volume decreased by 2 mt to 6,614 mt. In Xinjiang, the total registered warehouse warrant volume increased by 4,508 mt to 10,030 mt.

Overseas Market: As of March 5, the FOB Western Australia alumina price was $472/mt, with an ocean freight rate of $19.75/mt. The USD/CNY exchange rate selling price was around 7.28. This price, converted to domestic mainstream port selling prices, was approximately 4,125 yuan/mt, 744 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 demand for alumina exports and transfer to delivery warehouses, which have 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. The transfer to delivery warehouses cannot provide sustained demand, and the market expects some new alumina capacity to be gradually commissioned. In the medium and long term, spot alumina prices are still 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 changes in bauxite 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.]