Spot market transactions remained sluggish, with the total registered volume of alumina warrants continuing to decline [SMM Alumina Morning Comment]

SMM Alumina Morning Comment 6.5

Futures Market: Overnight, the most-traded alumina ag2509 futures contract opened at 3,053 yuan/mt, with a high of 3,058 yuan/mt, a low of 3,024 yuan/mt, and closed at 3,033 yuan/mt, down 10 yuan/mt or 0.34%, with open interest at 305,000 lots.

Ore: As of June 4, the SMM Import Bauxite Index was reported at $74.71/mt, unchanged 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; and the SMM Australia High-Temperature Bauxite CIF average price was reported at $65/mt, unchanged from the previous trading day.

Industry News:

1. Recently, Xiamen Xiangyu Co., Ltd. and Shunda Mining Co., Ltd. have made new progress in their cooperation, with the official establishment and commencement of operations of Shunyu Shipping Co., Ltd., a joint venture formed by enterprises under both companies. Shunda Mining is a large Chinese private enterprise deeply rooted in West African Guinea, primarily engaged in the exploration, mining, and sales of mineral resources such as bauxite.
2. According to SMM, the White House issued a statement today stating that US President Trump has officially raised tariffs on steel and aluminum from 25% to 50%, with the new tariffs taking effect at 00:01 Eastern Time on June 4. CCTV News reported that White House Press Secretary Karoline Leavitt confirmed on the same day that the White House had indeed sent a letter "urging" trade negotiation partners to "submit negotiation plans."

Basis Report: According to SMM data, on June 4, the SMM Alumina Index had a premium of 251.22 yuan/mt against the latest transaction price of the most-traded contract at 11:30.

Warrant Report: On June 4, the total registered volume of alumina warrants decreased by 9,597 mt from the previous trading day to 102,400 mt. In the Shandong region, the total registered volume of alumina warrants remained unchanged from the previous trading day at 601 mt. In the Henan region, it remained unchanged at 300 mt. In the Guangxi region, it remained unchanged at 3,001 mt. In the Gansu region, it remained unchanged at 0 mt. In the Xinjiang region, it decreased by 9,597 mt from the previous trading day to 98,500 mt.

Overseas Market: As of June 4, 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 an external selling price of approximately 3,272 yuan/mt at major domestic ports, which is 3 yuan/mt lower than the domestic alumina price. The alumina import window remains open.

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. The upward momentum of spot prices has slowed down, and market sentiment has turned cautious, with spot transactions becoming sluggish. In the short term, with the gradual resumption of production from some alumina facilities that were under maintenance and experiencing production cuts, as well as the opening of the alumina import window, the supply pressure on alumina is expected to gradually ease. The average profit margin 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 weaker. Going forward, it is necessary to continuously monitor changes in the capacity of domestic alumina enterprises, as well as 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 unrelated to SMM.]