Weekly Alumina Operating Rate Declines, Domestic Spot Alumina Prices Continue to Fall [SMM Morning Comment on Alumina]

SMM Morning Comment on Alumina, March 14

Futures Market: In the night session, the most-traded alumina 2505 contract opened at 3,137 yuan/mt, with a high of 3,147 yuan/mt and a low of 3,121 yuan/mt, finally closing at 3,125 yuan/mt, down 22 yuan/mt or 0.69%. Open interest stood at 217,000 lots.

Ore Market: As of March 13, the SMM imported bauxite index was $93.39/mt, flat from the previous trading day. The SMM Guinea bauxite CIF average price was $91/mt, flat from the previous trading day. The SMM Australian low-temperature bauxite CIF average price was $87/mt, flat from the previous trading day. The SMM Australian high-temperature bauxite CIF average price was $81/mt, also flat from the previous trading day.

Spot Alumina: On Thursday, 11,000 mt of spot alumina was traded in Henan at transaction prices of 3,230-3,260 yuan/mt, while 2,000 mt was traded in Shanxi at a transaction price of 3,220 yuan/mt.

Industry Dynamics:

1. SMM Weekly Aluminum Production: According to SMM, as of this Thursday (March 6-13), the national operating capacity of aluminum stood at around 43.78 million mt/year, with an operating rate of 95.6%. Recent aluminum production resumption has pushed operating capacity higher. However, due to the time required to reach full production, there was no significant contribution to this week's aluminum production, which stood at around 857,000 mt, up 0.06% WoW.
2. SMM Weekly Alumina Production: According to SMM, as of this Thursday (March 6-13), the national weekly production of metallurgical-grade alumina was 1.693 million mt, down 0.94% WoW, mainly due to production cuts at some alumina refineries in Shanxi and Shandong.
3. SMM Weekly Alumina Production Dynamics: According to SMM data, as of this Thursday, the total installed capacity of metallurgical-grade alumina in China was 105.02 million mt/year, flat WoW. The total operating capacity was 88.26 million mt/year, down 860,000 mt WoW. The national weekly operating rate of alumina decreased by 0.8 percentage points WoW to 84.04%.
4. Alumina Port Inventory: According to SMM statistics on March 13, domestic port inventories of alumina totaled 45,000 mt, up 2,000 mt from the previous week.

Spot-Futures Price Spread Daily Report: According to SMM data, on March 13, the SMM alumina index showed a premium of 182 yuan/mt against the most-traded contract's latest transaction price at 11:30.

Warrant Daily Report: On March 13, the total registered warrants for alumina increased by 4,483 mt from the previous trading day to 212,000 mt. In Shandong, the total registered warrants remained flat at 45,130 mt. In Henan, the total registered warrants were unchanged at 28,200 mt. In Guangxi, the total registered warrants were also flat at 20,100 mt. In Gansu, the total registered warrants decreased by 1,800 mt to 16,500 mt. In Xinjiang, the total registered warrants increased by 6,283 mt to 142,600 mt.

Overseas Market: As of March 13, 2025, the FOB Western Australia alumina price was $425/mt, with an ocean freight rate of $20.55/mt. The USD/CNY exchange rate selling price was around 7.26. This price translates to an external selling price of approximately 3,738 yuan/mt at major domestic ports, 413 yuan/mt higher than domestic alumina prices. The alumina import window remains closed. On the export side, based on the latest spot transaction prices in Shandong, the domestic alumina export cost is estimated at around $470/mt, lower than overseas spot alumina prices, keeping the export window closed.

Summary: Recently, the tug-of-war between buyers and sellers in the alumina market has continued. The spot alumina market saw sporadic transactions, with transaction prices showing a further slight decline, centering around 3,200-3,300 yuan/mt. The domestic alumina export window remains closed, and the total registered warrants in alumina delivery warehouses have exceeded 200,000 mt. Subsequent alumina exports and transfers to delivery warehouses are unlikely to provide sustained demand. Fundamentals side, in the short term, alumina operating capacity is expected to fluctuate, with no significant decline anticipated. This week, the national total operating capacity of alumina was 88.26 million mt. The alumina market remains in a slight surplus, and spot alumina prices are likely to fluctuate downward in the short term.

[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.]