Inventory buildup of bauxite at ports, gradual opening of alumina import window [SMM Alumina Morning Comment]

SMM Alumina Morning Comment on June 3

Futures Market: The night session was not open last Friday. The most-traded ag2509 futures contract opened at 2,955 yuan/mt in the daytime session, with a high of 2,973 yuan/mt, a low of 2,930 yuan/mt, and closed at 2,962 yuan/mt, up 1 yuan/mt or 0.03% from the previous close, with an open interest of 320,000 lots.

Ore: As of May 30, the SMM Import Bauxite Index was reported at $74.38/mt, up $0.27/mt from the previous trading day. The SMM Guinea Bauxite CIF average price was reported at $74/mt, unchanged from the previous trading day. The SMM Australia Low-Temperature Bauxite CIF average price was reported at $70/mt, unchanged from the previous trading day. The SMM Australia High-Temperature Bauxite CIF average price was reported at $65/mt, unchanged from the previous trading day.

Industry News:

1. Bauxite Port Inventory: According to SMM statistics as of May 30, the total bauxite inventory at nine domestic ports was 21.56 million mt, up 580,000 mt from the previous week.
2. According to Nanshan Aluminum, the raw material grinding and digestion unit hot commissioning for the Phase III alumina project of Indonesia Bintan Alumina Company was recently initiated simultaneously, marking the official entry of the project into the trial production stage and injecting new momentum into the company's development.
3. Data released by the International Aluminium Institute (IAI) showed that global alumina production in April 2025 was 12.407 million mt, with a daily average production of 413,600 mt. IAI stated that China's estimated alumina production in April 2025 was 7.384 million mt.
4. Alumina Production: According to SMM data, China's metallurgical-grade alumina production in May 2025 (31 days) increased by 2.66% MoM and 4.06% YoY. As of the end of May, China's existing metallurgical-grade alumina capacity was approximately 110.82 million mt, with the actual operating capacity down 0.46% MoM and an operating rate of 77.3%.

Basis Report: According to SMM data, the SMM Alumina Index premium against the latest transaction price of the most-traded contract at 11:30 on May 30 was 314.53 yuan/mt.

Warrant Report: On May 30, the total registered alumina warrant volume decreased by 11,412 mt from the previous trading day to 126,700 mt. The total registered alumina warrant volume in the Shandong region remained unchanged from the previous trading day at 601 mt. The total registered alumina warrant volume in the Henan region decreased by 1,200 mt from the previous trading day to 300 mt. The total registered alumina warrant volume in the Guangxi region remained unchanged from the previous trading day at 30.01 million mt. The total registered alumina warrant volume in the Gansu region decreased by 3,601 mt from the previous trading day to 1,504 mt. The total registered alumina warrant volume in the Xinjiang region decreased by 6,611 mt from the previous trading day to 121,300 mt.

Overseas Market: As of May 30, 2025, the FOB Western Australia alumina price was $370/mt, with an ocean freight rate of $21.95/mt. The USD/CNY selling rate was around 7.21. This price translates to approximately 3,275 yuan/mt at domestic major ports, which is 1 yuan/mt lower than the domestic alumina price, indicating that the alumina import window is gradually opening.

Summary: The weekly operating capacity of alumina continued to rebound, reaching 86.67 million mt/year as of last Thursday, up WoW. This has further alleviated the pressure on spot supply, and the upward momentum of spot prices has slowed down. Overseas alumina transactions have been relatively sluggish recently, with relatively small price fluctuations. As domestic prices continue to rise, alumina imports have shifted from losses to profits, and the domestic alumina import window is gradually opening. In the short term, with the gradual resumption of production of some alumina facilities that were under maintenance and experiencing production cuts, the supply pressure of alumina is expected to gradually ease. The average profit of the alumina industry has entered a profitable state, and the market has strong expectations for alumina production resumptions. Alumina futures prices have taken the lead in pulling back, which may drive spot prices to weaken. In the future, it is necessary to continuously monitor changes in the capacity of domestic alumina enterprises and the supply of imported alumina.

[The information provided is for reference only. This article does not constitute direct advice for investment research and decision-making. Clients should make decisions cautiously and should not rely on this information to replace their own independent judgment. Any decisions made by clients are not related to SMM.]