Alumina news was frequently disrupted during the day, with prices closing up 4.42% [SMM Aluminum Futures Brief Comment]

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SMM July 2 Report:

Today, the most-traded SHFE aluminum 2508 contract opened at RMB 20,645/mt, with a high of RMB 20,725/mt, a low of RMB 20,630/mt, and closed at RMB 20,635/mt, down 0.10%. Trading volume reached 80,700 lots, and open interest stood at 284,000 lots.

SMM Commentary: On the macro front, domestic supportive policies continue to strengthen with unwavering focus on boosting consumption; overseas macro factors remain mixed with persistent risks. Fundamentally, some aluminum smelters increased casting ingot output, while the off-season demand and fear of high prices in downstream sectors led to sluggish market transactions. Aluminum ingot inventory only declined slightly, registering 14.9 mt, 10.8 mt, and 7.2 mt in Guangdong, Wuxi, and Gongyi respectively as of July 2, 2025, totaling 32.9 mt with a 0.05 mt decrease from the previous day. Spot premiums/discounts weakened significantly. Short-term aluminum prices are expected to remain in the doldrums, with close monitoring needed on casting ingot volumes and inventory changes.

Today, the most-traded alumina 2509 contract opened at RMB 2,943/mt, peaked at RMB 3,074/mt, bottomed at RMB 2,943/mt, and closed at RMB 3,071/mt, up 4.38%. Trading volume reached 306,000 lots, and open interest stood at 275,000 lots.

SMM Commentary: In the near term, alumina operating capacity is expected to stay elevated, maintaining relatively loose spot supply and capping spot alumina prices. Previous days' futures rally triggered some transfer-to-delivery-warehouse demand, temporarily tightening spot supply and prompting suppliers to raise quotes, halting spot price declines. Despite recent alumina futures pullback, which turned risk-free arbitrage profits negative again and may weaken delivery demand, intraday price spikes occurred due to bauxite supply disruptions. Continuous attention is needed on bauxite availability and alumina production dynamics. Cost-wise, Q3 bauxite long-term contract prices are anticipated to stabilize or decline, leading to a marginal downward revision in overall alumina production costs. As alumina prices continue to fall, cost support is expected to gradually emerge. Short-term spot alumina prices are projected to consolidate.

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