Overseas Alumina Transaction Prices Drop Again, Domestic Spot Transactions Remain Sluggish [SMM Morning Comment on Alumina]

SMM Alumina Morning Comment 3.12

Futures Market: During the night session, the most-traded alumina 2505 contract opened at 3,192 yuan/mt, reached a high of 3,225 yuan/mt and a low of 3,192 yuan/mt, and finally closed at 3,196 yuan/mt, up 2 yuan/mt or 0.07%. Open interest stood at 201,000 lots.

Ore Market: As of March 11, the SMM imported bauxite index was reported at $94.74/mt, unchanged from the previous trading day. The SMM Guinea bauxite CIF average price was $93/mt, also unchanged, while the SMM Australia bauxite CIF average price was $91/mt, remaining flat as well.

Spot Alumina: On Tuesday, 2,000 mt of alumina was traded in Shandong at a transaction price of 3,265 yuan/mt.

Industry News:

(1) Hydro Energi AS signed a long-term power purchase agreement (PPA) with NTE to supply a total of 660 GWh of electricity during 2027–2029. The agreement will be integrated into Hydro Energy's overall power portfolio, which includes 9.4 TWh of annual self-generated power and approximately 10 TWh of long-term contracted supply. The contract delivery period is from January 1, 2027, to December 31, 2029, covering the NO3 price zone (the third price area in the Norwegian power market, where electricity prices may vary due to supply-demand relationships, power grid conditions, etc.). As a key player in the Nordic power market, Hydro Energy is responsible for procuring electricity for Hydro's aluminum production. Renewable energy is critical to its aluminum production, enabling a carbon footprint approximately 75% lower than the global average and supporting the company's technological roadmap to achieve net-zero emissions by 2050.

(2) Overseas Alumina Transactions: On March 10, 30,000 mt of alumina was traded at $480/mt FOB Vila Do Conde, Brazil, with shipment scheduled for late March to early April.

(3) Overseas Alumina Transactions: On March 11, 35,000 mt of alumina was traded at $440/mt FOB Kendawangan, Indonesia, with shipment scheduled for early April.

Spot-Futures Price Spread Daily Report: According to SMM data, on March 11, the SMM alumina index showed a premium of 172 yuan/mt against the most-traded contract's latest transaction price at 11:30.

Warehouse Warrant Daily Report: On March 11, the total registered warehouse warrants for alumina increased by 10,800 mt from the previous trading day to 199,100 mt. In Shandong, the total registered warehouse warrants remained unchanged at 4,513 mt. In Henan, the total registered warehouse warrants increased by 10,500 mt to 24,900 mt. In Guangxi, the total registered warehouse warrants remained unchanged at 20,100 mt. In Gansu, the total registered warehouse warrants increased by 301 mt to 18,300 mt. In Xinjiang, the total registered warehouse warrants remained unchanged at 131,200 mt.

Overseas Market: As of March 11, the FOB Western Australia alumina price was $472/mt, with ocean freight rates at $20.05/mt. The USD/CNY exchange rate selling price was around 7.26. This price translates to an external selling price of approximately 4,114 yuan/mt at major domestic ports, 757 yuan/mt higher than domestic alumina prices. The alumina import window remains closed. Based on SMM Shandong alumina prices and considering transportation and port miscellaneous fees, the domestic alumina export cost is approximately $480/mt, and the domestic alumina export window remains closed.

Summary: Recently, the tug-of-war between buyers and sellers in the alumina market has continued, with sluggish spot transactions and stable spot prices. Overseas alumina transaction prices have further declined, and the domestic alumina export window remains closed, making it unlikely 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 unrelated to SMM.]