Imported ore transactions fell further, and the cost support effect of alumina weakened [SMM Alumina Morning Comment]

SMM Alumina Morning Comment on May 13

Futures Market: Overnight, the most-traded alumina ag2509 futures contract opened at 2,856 yuan/mt, with a high of 2,866 yuan/mt, a low of 2,825 yuan/mt, and closed at 2,832 yuan/mt, down 11 yuan/mt or 0.39%, with open interest at 290,000 lots.

Ore Market: As of May 12, the SMM Import Bauxite Index was reported at $73.61/mt, down $3.86/mt from the previous trading day, mainly due to a decline in imported ore transactions. The SMM Guinea Bauxite CIF average price was reported at $75/mt, down $3.50/mt from the previous trading day. The SMM Australia Low-Temperature Bauxite CIF average price was reported at $80/mt, unchanged from the previous trading day. The SMM Australia High-Temperature Bauxite CIF average price was reported at $72/mt, unchanged from the previous trading day.

Industry News:

(1) A large alumina refinery in Shandong raises liquid caustic soda purchase price: According to SMM, starting from May 13, a large alumina refinery in Shandong adjusted the purchase price of 32% ionic membrane liquid caustic soda, increasing it by 20 yuan/mt from the base price of 725 yuan/mt. The ex-factory price under the two-invoice system was set at 745 yuan/mt (approximately 2,328 yuan/mt converted to 100% concentration).

Basis Report: According to SMM data, on May 12, the SMM Alumina Index had a premium of 103 yuan/mt against the latest transaction price of the most-traded contract at 11:30.

Warrant Report: On May 12, the total registered alumina warrants decreased by 7,213 mt from the previous trading day to 242,600 mt. In the Shandong region, the total registered alumina warrants remained unchanged at 601 mt from the previous trading day. In the Henan region, the total registered alumina warrants remained unchanged at 3,001 mt from the previous trading day. In the Guangxi region, the total registered alumina warrants decreased by 2,102 mt from the previous trading day to 18,600 mt. In the Gansu region, the total registered alumina warrants remained unchanged at 16,800 mt from the previous trading day. In the Xinjiang region, the total registered alumina warrants decreased by 13,900 mt from the previous trading day to 187,600 mt.

Overseas Market: As of May 12, 2025, the FOB Western Australia alumina price was $348/mt, with an ocean freight rate of $19.80/mt. The USD/CNY exchange rate selling price was around 7.23. This price translates to an external selling price of approximately 3,084 yuan/mt at major domestic ports, which is 184.86 yuan/mt higher than the domestic alumina price. The alumina import window remained closed.

Summary:

Last week, there were both increases and decreases in the operating capacity of alumina enterprises, with a slight overall decrease of 80,000 mt/year in total operating capacity. It is expected that some alumina enterprises will conduct maintenance in the following period, while new alumina capacity is expected to continue to be commissioned and released. In the short term, the operating capacity of alumina may fluctuate.Recently, downstream feedback indicates that spot cargo supplies are tight in some regional markets. With suppliers standing firm on quotes, spot prices may rebound slightly. However, on the cost side, bauxite prices have fallen significantly compared to the previous period, weakening the cost support. Overall, the alumina market is influenced by a mix of bullish and bearish factors, and prices are expected to fluctuate in the short term.

[The information provided is for reference only. This article does not constitute direct advice for investment research and decision-making. 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.]