SMM Alumina Morning Comment on May 8
Futures Market: Overnight, the most-traded al2509 futures contract opened at 2,707 yuan/mt, with a high of 2,707 yuan/mt, a low of 2,686 yuan/mt, and closed at 2,700 yuan/mt, down 7 yuan/mt or 0.24%, with open interest at 299,000 lots.
Ore: As of May 7, the SMM Import Bauxite Index stood at $78.24/mt, down $0.32/mt from the previous trading day, mainly due to some lower quotes in the market. Meanwhile, the buyer's target price was below $75/mt, with some enterprises reporting target prices below $70/mt. The SMM Guinea Bauxite CIF average price was reported at $77/mt, unchanged from the previous trading day. The SMM Australia Low-Temperature Bauxite CIF average price was at $80/mt, also unchanged, while the SMM Australia High-Temperature Bauxite CIF average price was at $72/mt, unchanged as well.
Industry News:
- According to a PTI report on May 6, 2025, several experts attending the launch of a mining white paper organized by the social welfare organization AIDENT in Bhubaneswar, Odisha, pointed out that Odisha should seize the critical "now or never" moment to systematically develop its abundant mineral resources to achieve inclusive prosperity. The white paper noted that Odisha holds 35% of India's iron ore reserves, 59% of its bauxite reserves, and abundant coal resources, but the current level of development of these resources is far from adequate, with issues such as institutional barriers, resource outflows, and missed historical opportunities. The report proposed a phased reform path: advancing regulatory reforms in the short term, building mineral corridors and manufacturing clusters in the medium term, and creating industrial hubs for green aluminum, steel, and critical minerals in the long term. Experts noted that fully unlocking the potential of bauxite could drive the development of over 10,000 small and medium-sized enterprises, create 2.4 million jobs, and attract billions of dollars in investment.
- According to a South China Morning Post report on May 7, an alumina refinery in Shanxi Province is introducing technology developed by France's IB2 company to enable the utilization of locally produced high-silicon, low-grade bauxite in China. The traditional Bayer process struggles to efficiently process bauxite with high silica content, but IB2 has developed a process to neutralize silicon and sulfur through a decade of R&D, allowing such ores to be refined into alumina using the Bayer process. In 2023, IB2 signed a 22-year cooperation agreement with China's Liulin Senze Coal & Aluminum Company to advance the implementation of this technology. The first set of industrial-scale equipment at the refinery is expected to commence production in July 2025.
Spot-Futures Price Spread Daily Report: According to SMM data, on May 7, the SMM Alumina Index had a premium of 202 yuan/mt against the latest transaction price of the most-traded contract at 11:30 a.m.
Warrant Daily Report: On May 7, the total registered alumina warrants decreased by 323 mt from the previous trading day to 259,700 mt. In Shandong, the total registered alumina warrants remained unchanged from the previous trading day at 601 mt. In Henan, the total registered alumina warrants decreased by 1,200 mt from the previous trading day to 3,001 mt. In Guangxi, the total registered alumina warrants decreased by 2,701 mt from the previous trading day to 27,900 mt. In Gansu, the total registered alumina warrants decreased by 1,198 mt from the previous trading day to 16,800 mt. In Xinjiang, the total registered alumina warrants increased by 4,776 mt from the previous trading day to 211,400 mt.
Overseas Market: As of May 7, 2025, the FOB Western Australia alumina price was $348/mt, with an ocean freight rate of $20.50/mt. The USD/CNY exchange rate selling price hovered around 7.24. This price translates to approximately 3,097 yuan/mt at major domestic ports, which is 201 yuan/mt higher than the domestic alumina price. The alumina import window remained closed.
Summary: With the commissioning of new capacity and the resumption of production from maintenance, the operating capacity of alumina has rebounded significantly. In the final week before the holiday, the weekly operating capacity increased by 3.48 million mt/year on a WoW basis. In the short term, some alumina refineries have plans for maintenance and production cuts, but at the same time, new alumina capacity will further ramp up production, and the operating capacity of alumina may exhibit slight fluctuations. On the cost side, caustic soda prices have remained largely stable overall, while bauxite prices have decreased, leading to a pullback in alumina costs and alleviating the loss pressure on alumina refineries. Overall, the tightening of spot alumina supplies caused by the concentration of maintenance and production cuts in the early stage is expected to ease, and short-term prices are expected to fluctuate.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make cautious decisions and should not rely on this information to replace their own independent judgment. Any decisions made by clients are not related to SMM.]
