Imported Bauxite CIF Index Slightly Adjusted Downward; Spot Alumina Prices May Fluctuate Downward [SMM Morning Comment on Alumina]

SMM Alumina Morning Comment 3.11

Futures Market: During the overnight session, the most-traded alumina 2505 futures contract opened at 3,195 yuan/mt, reached a high of 3,206 yuan/mt, a low of 3,181 yuan/mt, and closed at 3,197 yuan/mt, down 8 yuan/mt or 0.24%, with an open interest of 201,000 lots.

Ore Market: As of March 10, the SMM Imported Bauxite Index stood at $94.74/mt, down $0.4/mt from the previous trading day, mainly due to transactions of Guinean bauxite with mainstream grades at $93/mt, leading to a lower price center for the index. The SMM CIF average price for Guinean bauxite was $93/mt, unchanged from the previous trading day, while the SMM CIF average price for Australian bauxite was $91/mt, also unchanged.

Spot Alumina: On Monday, a Xinjiang aluminum plant tendered for the procurement of some alumina, with transaction prices ranging from 3,520 to 3,540 yuan/mt delivered to the plant.

Industry News: U.S. Commerce Secretary Howard Lutnick confirmed over the weekend that the "aluminum and steel tariffs" will proceed as scheduled. He expects the 25% tariffs on steel and aluminum imports, originally set to take effect on Wednesday (12th), to be implemented as planned. According to customs data, in 2024, China's direct exports to the U.S. accounted for only 4.1% of the total, while aluminum product exports to the U.S. accounted for 16.5% of the total. This indicates that the policy has limited impact on China's direct export volumes. However, attention should be paid to the risks of declining U.S. demand and weakening exports from Canada and Mexico, which may indirectly affect demand for Chinese aluminum semis.

Spot-Futures Price Spread Daily Report: According to SMM data, as of 11:30 a.m. on March 10, the SMM Alumina Index showed a premium of 174 yuan/mt against the most-traded contract's latest transaction price.

Warehouse Warrant Daily Report: On March 10, the total registered warehouse warrants for alumina increased by 17,400 mt to 188,300 mt compared to the previous trading day. In Shandong, the total registered warehouse warrants remained unchanged at 4,513 mt. In Henan, the total registered warehouse warrants decreased by 1,201 mt to 14,400 mt. In Guangxi, the total registered warehouse warrants remained unchanged at 20,100 mt. In Gansu, the total registered warehouse warrants increased by 8,114 mt to 18,000 mt. In Xinjiang, the total registered warehouse warrants increased by 10,500 mt to 131,200 mt.

Overseas Market: As of March 10, the FOB Western Australia alumina price was $472/mt, with an ocean freight rate of $20.05/mt. The USD/CNY exchange rate selling price was around 7.28. This price translates to an external selling price of approximately 4,128 yuan/mt at major domestic ports, which is 762 yuan/mt higher than domestic alumina prices. The alumina import window remains closed.

Summary: Recently, the tug-of-war between buyers and sellers in the alumina market continues, with sluggish spot alumina transactions and stable spot prices as the main trend. Overseas alumina transaction prices have further declined, and the domestic alumina export window remains closed, making it difficult for alumina exports to provide sustained demand. On the fundamentals side, no large-scale production cuts have been reported for operating alumina capacity, and the alumina market remains in a slight surplus. In the short term, spot alumina prices are expected to fluctuate downward.

[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 not related to SMM.]