The center of spot transaction prices shifted upward, and under the influence of disruptive events, sporadic offer prices in the bauxite market rose [SMM Alumina Morning Comment]

SMM Alumina Morning Comment on May 20

Futures Market: Overnight, the most-traded alumina 2509 futures contract opened at 3,149 yuan/mt, with a high of 3,202 yuan/mt, a low of 3,118 yuan/mt, and closed at 3,128 yuan/mt, up 33 yuan/mt or 1.07%. Open interest stood at 347,000 lots.

Spot Alumina: On Monday, inquiries revealed that some alumina was procured through tenders by aluminum plants in Xinjiang, with transaction prices ranging around 3,400-3,450 yuan/mt delivered to the plant. In Shanxi, 10,000 mt of alumina was traded at 3,150 yuan/mt, while in Henan, 2,000 mt was traded at 3,000 yuan/mt.

Ore: As of May 19, the SMM imported bauxite index was reported at $70.74/mt, up $0.33/mt from the previous trading day. This was mainly due to supply disruptions in Guinea's bauxite, making it unlikely for low-price offers below $70/mt to emerge in the short term. Some market offers increased significantly compared to the previous period, driving a rebound in the SMM imported bauxite index. The SMM Guinea bauxite CIF average price was reported at $70/mt, unchanged from the previous trading day. The SMM Australian low-temperature bauxite CIF average price was also reported at $70/mt, unchanged from the previous trading day. The SMM Australian high-temperature bauxite CIF average price was reported at $65/mt, unchanged from the previous trading day.

Industry News:

1. In April, China's bauxite imports exceeded 20 million mt. According to data from the General Administration of Customs, in April 2025, China imported 20.68 million mt of bauxite ore and its concentrate, up 25.6% MoM and 45.4% YoY. From January to April, cumulative imports reached 67.7 million mt, up 34.2% YoY.
2. According to China Customs, in April 2025, China exported 260,000 mt of alumina, up 101.6% YoY. From January to April 2025, cumulative alumina exports reached 960,000 mt, up 74.7% YoY.

Spot-Futures Price Spread Daily Report: According to SMM data, on May 19, the SMM alumina index was at a discount of 103.35 yuan/mt to the latest transaction price of the most-traded contract at 11:30.

Warrant Daily Report: On May 19, the total registered alumina warrants decreased by 1,805 mt from the previous trading day to 195,300 mt. In Shandong, the total registered alumina warrants remained unchanged at 601 mt from the previous trading day. In Henan, the total registered alumina warrants remained unchanged at 3,001 mt from the previous trading day. In Guangxi, the total registered alumina warrants remained unchanged at 12,600 mt from the previous trading day. In Gansu, the total registered alumina warrants remained unchanged at 6,306 mt from the previous trading day. In Xinjiang, the total registered alumina warrants decreased by 1,805 mt from the previous trading day to 173,200 mt.

Overseas Market: As of May 19, 2025, the FOB Western Australia alumina price was $370/mt, with an ocean freight rate of $21.50/mt. The USD/CNY exchange rate selling price was around 7.23. This price translates to approximately 3,279 yuan/mt at domestic major ports, which is 291 yuan/mt higher than the domestic alumina price, keeping the alumina import window closed.

Summary: Last week, maintenance and production cuts were concentrated among alumina enterprises in south China, with operating capacity decreasing by 2.9 million mt/year on a QoQ basis, leading to a further tightening of spot cargo availability. Additionally, alumina enterprises have been facing continuous losses in recent months, with a strong intention to refuse to budge on prices. Coupled with maintenance and production cuts, the tightening of spot cargo availability has led to a significant rebound in spot prices. Last Friday, due to the revocation of mining rights for some enterprises in Guinea, some currently operating enterprises received notices of suspension. This week, some miners declared force majeure to shipping companies. The specific impact of this incident on the supply of bauxite from Guinea remains to be assessed. In the short term, it may provide sentiment-based support for bauxite prices, thereby offering cost support for alumina. Going forward, it is necessary to continuously monitor changes in the operating capacity of alumina refineries, as well as the shipment volume of bauxite from Guinea at the raw material end and the dynamics of relevant enterprises.

[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 as a substitute for independent judgment. Any decisions made by clients are unrelated to SMM.]