Alumina Inventory Buildup Continues, Price Disparity Between North and South Persists [SMM Alumina Weekly Review]

SMM August 21 report:

Price review: As of Thursday this week, the SMM alumina index stood at 3,244.97 yuan/mt, down 3.15 yuan/mt WoW. In Shandong, prices were reported at 3,180-3,230 yuan/mt, down 15 yuan/mt WoW; in Henan, prices were 3,180-3,270 yuan/mt, down 15 yuan/mt WoW; in Shanxi, prices were 3,200-3,240 yuan/mt, down 20 yuan/mt WoW; in Guangxi, prices were 3,300-3,380 yuan/mt, up 10 yuan/mt WoW; in Guizhou, prices were 3,300-3,380 yuan/mt, up 10 yuan/mt WoW; in Bayuquan, prices were 3,260-3,340 yuan/mt, down 50 yuan/mt WoW.

Overseas market: As of August 21, 2025, FOB Western Australia alumina price was $372/mt, with an ocean freight rate of $23.15/mt and a USD/CNY selling rate around 7.19. This price translates to approximately 3,292.48 yuan/mt for domestic mainstream ports, which is 47.51 yuan/mt higher than the alumina index price. However, compared to spot aluminum prices in south China, the import window has opened. A total of three overseas alumina spot transactions were inquired about this week, with fluctuating prices. Recent overseas alumina spot prices have mainly been adjusting, with specific transaction details as follows:

1) On August 14, two overseas alumina deals totaling 60,000 mt were transacted at $374/mt FOB Western Australia, with September shipment.

2) On August 18, 30,000 mt of alumina was transacted at $369/mt FOB Eastern Australia, with September shipment.

Domestic market: According to SMM data, as of Thursday this week, the total capacity of metallurgical-grade alumina in China reached 110.32 million mt/year, with operating capacity at 91.57 million mt/year. The national weekly operating rate of alumina decreased by 0.2 percentage points WoW to 83.00%, mainly due to some enterprises starting regular maintenance. Specifically, the weekly operating rate of alumina in Shandong remained unchanged at 91.15%; in Shanxi, it stayed flat at 77.2%; in Henan, it increased by 3.57 percentage points to 65.83%; in Guangxi, it fell by 3.71 percentage points to 89.44%; in Guizhou, it remained steady at 83.33%.

During the period, spot alumina transactions remained sluggish, with the north-south price divergence continuing.

In south China, the supply of spot alumina remained relatively tight, with sellers refusing to budge on prices, although no specific transactions were reported. Spot alumina prices in the south had bottom support.

In north China, spot aluminum supply remains relatively loose, with sluggish transactions. Only some aluminum companies are tendering for alumina purchases, and transaction prices are around 3,200 yuan/mt ex-works in Shanxi, still mainly in the doldrums.

Overall, the fundamentals of alumina are expected to maintain a surplus pattern, with continuous inventory buildup. This week, alumina inventory increased by about 52,000 mt. As inventory continues to build up, the top pressure on spot alumina prices is expected to gradually increase. In the short term, spot alumina prices are expected to maintain a north-south divergence, with the north continuing to be in the doldrums and the south having stronger bottom support. Subsequently, it will be necessary to continuously monitor the alumina inventory situation and changes in operating capacity.

Source: SMM