The rebound in futures has driven up spot alumina prices, which are expected to hold up well in the short term [SMM Weekly Alumina Review]

SMM News on July 10:

Price Review:

As of Thursday this week, the SMM alumina index stood at 3,135.09 yuan/mt, up 22.36 yuan/mt from Thursday last week. In Shandong, prices were reported at 3,090-3,150 yuan/mt, up 40 yuan/mt from Thursday last week; in Henan, prices were reported at 3,100-3,180 yuan/mt, up 40 yuan/mt from Thursday last week; in Shanxi, prices were reported at 3,100-3,160 yuan/mt, up 50 yuan/mt from Thursday last week; in Guangxi, prices were reported at 3,200-3,250 yuan/mt, up 45 yuan/mt from Thursday last week; in Guizhou, prices were reported at 3,150-3,280 yuan/mt, up 35 yuan/mt from Thursday last week; and in Bayuquan, prices were reported at 3,210-3,290 yuan/mt.

Overseas Market:

As of July 10, 2025, the FOB Western Australia alumina price stood at $366/mt, with an ocean freight rate of $22.15/mt. The USD/CNY selling rate hovered around 7.20. This price translates to an approximate external selling price of 3,236 yuan/mt at major domestic ports, which is 101 yuan/mt higher than the domestic alumina price. The alumina import window remained closed. This week, two overseas spot alumina transactions were inquired about, with prices rebounding slightly compared to last week. The details are as follows:

1. 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. On July 10, 30,000 mt of alumina was traded overseas at a transaction price of $410/mt FOB Brazil, with an August shipment date.

Domestic Market:

According to SMM data, as of Thursday this week, the total installed capacity of metallurgical-grade alumina nationwide was 110.82 million mt/year, with a total operating capacity of 88.57 million mt/year. The weekly operating rate of alumina nationwide decreased by 0.05 percentage points WoW to 79.92%. Specifically, the weekly operating rate of alumina in Shandong decreased by 1.53 percentage points WoW to 84.71%; in Shanxi, it remained unchanged WoW at 76.6%; in Henan, it remained unchanged WoW at 59.17%; and in Guangxi, it decreased by 2.04 percentage points WoW to 88.87%.

During the period, spot alumina transactions rebounded slightly, mainly due to the opening of the arbitrage window between alumina futures and spot markets last week. Futures and spot traders were more active in inquiries, and suppliers refused to budge on prices, leading to an upward trend in transaction prices. Among them, the ex-factory transaction prices of alumina in north China ranged from 3,150-3,185 yuan/mt; and in south-west China, the transaction prices of alumina ranged from 3,250-3,280 yuan/mt.

Overall:

From the perspective of the demand for raw materials in aluminum smelter production, the alumina supply is relatively loose. The operating capacity of alumina is nearly 88.5 million mt/year, while the combined annualized operating capacity demand for aluminum smelter production and net exports is approximately 86 million mt. According to SMM, the weekly inventory of alumina at aluminum smelters increased by about 22,000 mt MoM this week. However, after the alumina futures rose, arbitrage trading between futures and spot markets was initiated. The demand for delivery brand alumina from futures and spot traders increased, with active inquiries. The spot alumina supply tightened, and suppliers refused to budge on prices. Under these circumstances, some high-premium transactions occurred, driving a rebound in spot prices. In the short term, spot alumina prices are expected to hold up well. Subsequent trends need to be closely monitored, including the total registered volume of SHFE warrants and changes in alumina's operating capacity.

Source: SMM

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