Under the Alumina Surplus Pattern, Futures and Spot Price Center Shifts Downward [SMM Morning Comment on Alumina]

SMM Morning Comment on Alumina, 3.18

Futures Market: In the overnight session, the most-traded alumina 2505 futures contract opened at 3,110 yuan/mt, reached a high of 3,125 yuan/mt, a low of 3,103 yuan/mt, and closed at 3,119 yuan/mt, up 0.29%. Open interest stood at 217,000 lots, an increase of 398 lots. Spot Alumina Prices: On March 17, SMM alumina was quoted at 3,278 yuan/mt, down 28 yuan/mt from the previous trading day.

Bauxite: As of March 17, the SMM imported bauxite index stood at $93.39/mt, unchanged from the previous trading day. The SMM Guinea bauxite CIF average price was $91/mt, also unchanged, while the SMM Australia bauxite CIF average price was $87/mt, remaining flat as well.

Industry News:

1. China Nonferrous Metal Industry's Sixth Metallurgical Construction Co., Ltd. (referred to as "Sixth Metallurgical") successfully won the tender for four core sections of the ecological aluminum industry chain project at Fangchenggang Port in Guangxi, with a contract value of approximately 250 million yuan. The project, with an annual alumina production capacity of 2.4 million mt and supporting facilities, is a key component of the New Western Land-Sea Corridor. Fangchenggang Zhongsilk New Material Technology Co., Ltd. is the construction unit responsible for the project, which adopts the internationally advanced high-low temperature switching Bayer process. The plan includes building two alumina production lines, each with an annual capacity of 1.2 million mt, along with a red mud comprehensive utilisation system.

2. Spot Alumina: On Monday, 5,000 mt of alumina was transacted in Guizhou at a price of 3,250 yuan/mt. In Xinjiang, aluminum smelters tendered for alumina procurement, with transaction prices at 3,450 yuan/mt delivered to Xinjiang.

Spot-Futures Price Spread Daily Report: According to SMM data, on March 17, the SMM alumina index showed a premium of 169 yuan/mt against the most-traded contract's latest transaction price at 11:30.

Warrant Daily Report: On March 17, the total registered warrants for alumina increased by 2.46 mt from the previous trading day to 282,000 mt. In Shandong, the total registered warrants remained unchanged at 4,513 mt. In Henan, the total registered warrants were also unchanged at 30,600 mt. In Guangxi, the total registered warrants stayed flat at 4,980 mt. In Gansu, the total registered warrants increased by 7,459 mt to 2,400 mt. In Xinjiang, the total registered warrants rose by 17,153 mt to 1,300 mt.

Overseas Market: As of March 17, the FOB Western Australia alumina price was $425/mt, with ocean freight rates at $20.55/mt. The USD/CNY exchange rate selling price was around 7.26. This price translates to an external selling price of approximately 3,735 yuan/mt at major domestic ports, which is 457 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. The spot alumina market has seen sporadic transactions, with transaction prices experiencing a slight further decline, centering around 3,200-3,300 yuan/mt. The domestic alumina export window remains closed, and the total registered warrants in alumina futures delivery warehouses have exceeded 280,000 mt. Subsequent alumina exports and transfers to delivery warehouses may struggle to provide sustained demand. Fundamentals side, in the short term, alumina operating capacity is expected to see both increases and decreases, with no significant decline anticipated in total operating capacity. The alumina market is likely to maintain a slight surplus, and spot alumina prices are expected 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 cautious decisions and not substitute this for independent judgment. Any decisions made by clients are unrelated to SMM.]