Operating capacity of alumina is expected to remain high, exerting downward pressure on spot alumina prices [SMM Alumina Morning Comment]

SMM Alumina Morning Comment on June 27

Futures Market:The overnight most-traded alumina 2509 futures contract opened at 2,952 yuan/mt, with a high of 2,996 yuan/mt, a low of 2,942 yuan/mt, and closed at 2,986 yuan/mt, up 38 yuan/mt or 1.29%. The open interest stood at 299,000 lots.

Ore Aspect:As of June 26, the SMM imported bauxite index stood at $74.3/mt, down $0.01/mt from the previous trading day, mainly due to the decline in caustic soda prices. The SMM Guinea bauxite CIF average price was $74/mt, unchanged from the previous trading day. The SMM Australia low-temperature bauxite CIF average price was $70/mt, unchanged from the previous trading day. The SMM Australia high-temperature bauxite CIF average price was $61/mt, unchanged from the previous trading day.

Industry News:

1. Weekly Production Dynamics of Alumina: According to SMM data, as of Thursday this week, the total installed capacity of metallurgical-grade alumina in China was 110.82 million mt/year, with a total operating capacity of 88.97 million mt/year. The weekly operating rate of alumina in China rebounded by 0.36 percentage points to 80.28% WoW.

2. Alumina Port Inventory: According to SMM statistics on June 26, the total alumina inventory at domestic ports was 25,600 mt, down 11,400 mt from the previous week.

3. Overseas Alumina Transactions: On June 25, 30,000 mt of alumina was traded overseas at a transaction price of $380.03/mt FOB India, with a shipment period in July.

Spot-Futures Price Spread Daily Report:According to SMM data, on June 26, the SMM alumina index had a premium of 197.67 yuan/mt against the latest transaction price of the most-traded contract at 11:30.

Warrant Daily Report:On June 26, the total registered alumina warrant volume remained unchanged from the previous trading day at 33,900 mt. The total registered alumina warrant volume in the Shandong region remained unchanged from the previous trading day at 0 mt. The total registered alumina warrant volume in the Henan region remained unchanged from the previous trading day at 0 mt. The total registered alumina warrant volume in the Guangxi region remained unchanged from the previous trading day at 2,701 mt. The total registered alumina warrant volume in the Gansu region remained unchanged from the previous trading day at 0 mt. The total registered alumina warrant volume in the Xinjiang region decreased by 1,205 mt from the previous trading day to 31,200 mt.

Overseas Market:As of June 26, 2025, the FOB Western Australia alumina price was $370/mt, with an ocean freight rate of $21.90/mt. The USD/CNY selling rate was around 7.19. This price translates to an external selling price of approximately 3,262 yuan/mt at domestic mainstream ports, which is 137.41 yuan/mt higher than the domestic alumina price. The alumina import window remained closed.

Summary:

In the short term, the operating capacity of alumina is expected to remain high, and spot market supply will maintain a relatively loose state, exerting downward pressure on spot alumina prices. On the cost side, long-term contract prices for bauxite in Q3 are expected to stabilize or decline, and overall alumina production costs are anticipated to experience a slight decrease while remaining stable. As alumina prices continue to fall, cost support effects are expected to gradually emerge. In the short term, spot alumina prices are projected to remain in the doldrums.

[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should exercise caution in decision-making and must not use this as a substitute for independent judgment. Any decisions made by clients are unrelated to SMM.]