The supply in the spot market remains relatively loose, and alumina prices remain in the doldrums [SMM Alumina Morning Comment]

SMM Alumina Morning Comment on July 7

Futures Market:On Friday last week, the night session of the most-traded alumina 2509 futures contract opened at 3,015 yuan/mt, with a high of 3,025 yuan/mt, a low of 2,981 yuan/mt, and closed at 3,012 yuan/mt, down 12 yuan/mt or 0.40%, with an open interest of 272,000 lots.

Ore Aspect:As of July 4, the SMM imported bauxite index was reported at $74.3/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 $61/mt, unchanged from the previous trading day.

Industry News:

1. Overseas alumina transactions: On July 5, 30,000 mt of alumina was traded overseas at a transaction price of $363/mt FOB Eastern Australia, with an August shipment date.

2. According to SMM, starting from July 5, a large alumina refinery in Shandong adjusted the purchase price of 32% ionic membrane liquid caustic soda, increasing it by 15 yuan/mt from the basis of 735 yuan/mt; the ex-factory price under the two-invoice system was 750 yuan/mt (converted to 100% concentration, approximately 2,344 yuan/mt).

Spot-Futures Price Spread Daily Report:According to SMM data, on July 4, the SMM alumina index had a premium of 75.75 yuan/mt against the latest transaction price of the most-traded contract at 11:30.

Warrant Daily Report:On July 4, the total registered volume of alumina warrants remained unchanged from the previous trading day at 21,300 mt, with 0 mt in Shandong, 0 mt in Henan, 3,902 mt in Guangxi, 0 mt in Gansu, and 17,400 mt in Xinjiang.

Overseas Market:As of July 4, 2025, the FOB Western Australia alumina price was $361.6/mt, with an ocean freight rate of $21.80/mt, and the USD/CNY selling rate was around 7.18. This price translates to an external selling price of approximately 3,192 yuan/mt at major domestic ports, which is 76.23 yuan/mt higher than the domestic alumina price, keeping the alumina import window closed.

Summary:

Last week, the operating capacity of alumina decreased by 340,000 mt/year to 88.63 million mt/year. In the short term, the operating capacity of alumina is expected to remain high, with only a few manufacturers conducting routine maintenance. The supply in the spot market remains relatively loose, exerting downward pressure on the spot price of alumina. But recently, alumina futures have surged, bringing the risk-free arbitrage window between futures and spot markets near opening. Futures and spot traders have shown relatively active inquiries, spot alumina supplies have tightened periodically, and suppliers have raised their quotes. In the short term, spot alumina prices may see a slight rebound. However, subsequent trends will still depend on changes in supply and demand fundamentals, futures price movements, and shifts in transfer to delivery warehouse demands.

[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make cautious decisions and not use this to replace independent judgment. Any decisions made by clients are unrelated to SMM.]