Scattered transactions were at a premium to the online price. Spot alumina prices may continue to hold up well in the short term [SMM Alumina Morning Comment]

SMM Alumina Morning Comment on July 15

Futures Market: Overnight, the most-traded alumina 2509 futures contract opened at 3,138 yuan/mt, with a high of 3,194 yuan/mt, a low of 3,120 yuan/mt, and closed at 3,164 yuan/mt, up 27 yuan/mt or 0.85%, with an open interest of 246,000 lots.

Ore: As of July 14, the SMM imported bauxite index was reported at $73.69/mt, down $0.03/mt from the previous trading day; the SMM Guinea bauxite CIF average price was reported at $73.5/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; the SMM Australia high-temperature bauxite CIF average price was reported at $61/mt, unchanged from the previous trading day.

Spot Market: On Monday, aluminum smelters in north-west China tendered to purchase some alumina, with the winning bid price converting to around 3,200 yuan/mt ex-factory in Shanxi.

Industry News:

On July 14, Alcoa and its joint venture partner Ignis Equity Holdings confirmed that the restart of the San Ciprián aluminum smelter in Spain, which had been suspended due to a previous nationwide power outage, had been reinitiated. The widespread power outage in Spain in April affected the complex, causing the originally planned restart to be postponed. Alcoa and Ignis stated that after detailed reports and consultations with the Spanish government on the causes of the power outage and measures to enhance power grid resilience, they decided to resume the project schedule. Rob Bear, Alcoa's Vice President for Spain, said, "We have reviewed the government's report on the power outage and obtained commitments from the national and local governments on power grid reliability and energy competitiveness." Alcoa expects the smelter to record a net loss of approximately $90 million to $110 million in 2025, with the entire restart process expected to be completed by mid-2026.

Spot-Futures Price Spread Daily Report: According to SMM data, on July 14, the SMM alumina index had a premium of 25.74 yuan/mt against the latest transaction price of the most-traded contract at 11:30.

Warrant Daily Report: On July 14, the total registered alumina warrant volume increased by 4,803 mt from the previous trading day to 23,400 mt. The total registered alumina warrant volume in Shandong remained unchanged at 0 from the previous trading day, in Henan remained unchanged at 0 from the previous trading day, in Guangxi remained unchanged at 1,200 mt from the previous trading day, in Gansu remained unchanged at 0 from the previous trading day, and in Xinjiang increased by 4,803 mt from the previous trading day to 22,200 mt.

Overseas Market: As of July 14, 2025, the FOB Western Australia alumina price was $366/mt, with an ocean freight rate of $22.15/mt, and the USD/CNY selling rate was around 7.19. This price converts to approximately 3,232 yuan/mt for the external selling price at major domestic ports, which is 78 yuan/mt higher than the domestic alumina price, keeping the alumina import window closed.

Summary: From the perspective of raw material demand for aluminum production, alumina supply remains relatively ample, with alumina operating capacity nearing 88.5 million mt/year. The combined annualized operating capacity demand for aluminum production and net exports stands at approximately 86 million mt. According to SMM, alumina inventory at aluminum smelters increased by approximately 22,000 mt WoW last week. However, following the rise in alumina futures, futures-spot arbitrage opportunities emerged, driving increased demand from traders for alumina delivery brands and active inquiries. Spot alumina supply tightened as suppliers refused to budge on prices. Under these circumstances, some high-premium transactions emerged, boosting spot prices to rebound. In the near term, spot alumina prices are expected to hold up well, with subsequent trends requiring continuous monitoring of total SHFE warrant registrations and changes in alumina operating capacity.

[Data other than public information are based on public information, market discussions, and SMM's internal database models, processed by SMM for reference only, and do not constitute recommendations for decision-making.]