The fundamental surplus structure remains unchanged, with spot prices operating under pressure. [SMM Alumina Morning Comment]

SMM Alumina Morning Comment 9.17

Futures:In the night session, the most-traded alumina 2601 contract opened at 2,982 yuan/mt, hit a high of 2,985 yuan/mt and a low of 2,955 yuan/mt, and ended at 2,962 yuan/mt, down 17 yuan/mt or 0.57%, with open interest at 304,000 lots.

Ore side:As of September 16, 2025, the SMM imported bauxite index was $75.46/mt, down $0.02/mt from the previous trading day; the SMM Guinea bauxite CIF average was $75/mt, flat from the previous trading day; the SMM Australia low-temperature bauxite CIF average was $70/mt, flat from the previous trading day; the SMM Australia high-temperature bauxite CIF average was $61.5/mt, flat from the previous trading day; the low-grade bauxite self pick-up price excluding VAT in Shanxi was 605 yuan/mt, flat from the previous trading day. Recently, no production resumptions were heard for domestic ore in north China, and supply of domestic ore in the region remained tight, while imported ore supply was sufficient with high inventory levels. At the same time, the alumina supply structure was in surplus, and narrowing profit margins amid falling alumina prices reduced acceptance of high-priced bauxite. Overall, bauxite prices held up well within a range in the short term.

Spot prices:As of September 16, 2025, the SMM alumina index was 3,055.97 yuan/mt, down 9.46 yuan/mt MoM; the SMM Shandong alumina index was 2,977.2 yuan/mt, down 8.67 yuan/mt MoM; the SMM Henan alumina index was 3,043.2 yuan/mt, down 7.61 yuan/mt MoM; the SMM Shanxi alumina index was 3,005.22 yuan/mt, down 12.04 yuan/mt MoM; the SMM Guizhou alumina index was 3,207.57 yuan/mt, down 13.47 yuan/mt MoM; the SMM Guangxi alumina index was 3,188.57 yuan/mt, down 12.71 yuan/mt MoM. Today, a spot transaction was inquired in south China, with 5,000 mt of alumina traded in Guizhou at 3,150 yuan/mt. In the short term, spot alumina prices are expected to continue falling.

Industry developments:

• Australian miner VBX announced the discovery of a new low-silica bauxite deposit at East Coorabie with excellent grade (Al₂O₃ 33–39%, SiO₂ 4–7%), which could extend the mining life of the nearby Wooldadge mine. The company is advancing exploration work including infill drilling and hydrogeological studies, expected to be completed in October.

• Alcoa signed a funding agreement with Western Gas for the Equus gas field, aiming to support front-end engineering design with an investment of up to $30 million to secure long-term natural gas supply in Western Australia. Once implemented, this agreement will supply approximately 25% of Alcoa's refinery natural gas demand over the next decade, effectively strengthening energy security for its alumina production and highlighting global aluminum companies' deep strategic positioning in upstream resources amid the energy transition.

Spot-Futures Price Spread Daily Report:According to SMM data, as of 11:30 on September 16, the SMM alumina index was at a premium of 71.97 yuan/mt against the latest transaction price of the most-traded contract.

Warrant Daily Report:On September 16, the total registered volume of alumina warrants remained unchanged from the previous trading day at 151,300 mt. Warrant volumes by region also held steady: Shandong (0 mt), Henan (0 mt), Guangxi (0 mt), Gansu (0 mt), and Xinjiang (151,300 mt).

Overseas Market:As of September 16, 2025, the FOB Western Australia alumina price stood at $335/mt, with the ocean freight rate at $24/mt. Given a USD/CNY selling rate around 7.13, this translates to a domestic selling price at major ports of approximately 2,974.09 yuan/mt, which is 81.88 yuan/mt below the SMM alumina index, keeping the import arbitrage window open.

Summary:

Overall, the alumina market maintained a surplus during the period. Supply side, domestic operating capacity remained high, and with the import window still open, oversupply pressure intensified. No production cuts have been reported at alumina refineries. Demand side, aluminum smelters’ raw material inventories stayed elevated, leading to sluggish spot procurement. While some spot transactions occurred recently in south China, with less reluctance to budge on prices, offers in north China continued to trend lower. Given the supply-demand imbalance, spot alumina prices are expected to remain in the doldrums in the short term.

[Except for publicly available information, other data are derived by SMM based on public information, market communication, and internal database models, and are for reference only, not constituting decision-making advice.]