Spot alumina prices continued their downward trend [SMM Alumina Morning Comment]

SMM Alumina Morning Comment 9.29
Futures:On September 26, the most-traded alumina 2601 contract opened at 2,898 yuan/mt, hit a high of 2,899 yuan/mt, a low of 2,863 yuan/mt, and finally closed at 2,867 yuan/mt, down 34 yuan/mt or 1.17%, with open interest at 312,000 lots.

Ore side:As of September 26, the SMM imported bauxite index was quoted at $74.86/mt, flat from the previous trading day; the SMM Guinea bauxite CIF average price was quoted at $73.5/mt, flat from the previous trading day; the SMM Australia low-temperature bauxite CIF average price was quoted at $70/mt, flat from the previous trading day; the SMM Australia high-temperature bauxite CIF average price was quoted at $61.5/mt, flat from the previous trading day; the SMM Malaysia bauxite CIF average price was quoted at $50.5/mt, flat from the previous trading day; the SMM Malaysia bauxite CIF (washed) average price was quoted at $63/mt, flat from the previous trading day. Overall, for domestic bauxite, spot alumina prices continued to decline, compressing alumina refinery profits within the region. Although the supply pressure for northern bauxite has eased compared to earlier periods, supply within the region remains tight, and prices are expected to hold steady. For imported bauxite, with the pullback in Q4 long-term contract prices for large mining areas and against the backdrop of high absolute inventory levels, bauxite prices are expected to remain in the doldrums in the short term.

Industry News: 1) Australia's Canyon Resources plans to raise $141 million to advance Cameroon's first commercial bauxite project. The initial bauxite production capacity is expected to reach 1.2 million mt per year, with a long-term target to increase annual production to 10 million mt by 2032.

Spot Prices:As of September 26, 2025, the SMM alumina index was quoted at 2,991.17 yuan/mt, down 9.6 yuan/mt MoM; the SMM Shandong alumina index was quoted at 2,900 yuan/mt, down 10 yuan/mt MoM; the SMM Henan alumina index was quoted at 2,974.94 yuan/mt, down 11.98 yuan/mt MoM; the SMM Shanxi alumina index was quoted at 2,930.25 yuan/mt, down 10.36 yuan/mt MoM; the SMM Guizhou alumina index was quoted at 3,145.15 yuan/mt, down 9.06 yuan/mt MoM; the SMM Guangxi alumina index was quoted at 3,122.59 yuan/mt, down 12.86 yuan/mt MoM. On September 26, a spot transaction of 5,000 mt of alumina was inquired in Yunnan, with an ex-factory price of 3,070 yuan/mt. Overall, domestic alumina operating capacity remains high, with weekly production flat from the previous week; China's alumina supply landscape is loose, and prices are expected to remain in the doldrums. With the import window open, the loose supply situation is expected to be further exacerbated, keeping spot alumina prices under pressure.

Spot-Futures Price Spread Daily Report: According to SMM data, on September 26, the SMM alumina index was at a premium of 70.17 yuan/mt against the latest transaction price of the most-traded contract at 11:30.

Warrant Daily Report: On September 26, the total registered volume of alumina warrants remained flat from the previous trading day at 149,200 mt. The total registered volume of alumina warrants in Shandong remained flat from the previous trading day at 0, in Henan at 0, in Guangxi at 0, in Gansu at 0, and in Xinjiang it remained flat from the previous trading day at 149,200 mt.

Overseas Market: As of September 26, 2025, the FOB Western Australia alumina price was $323/mt, the ocean freight rate was $23.9/mt, and the USD/CNY selling rate was around 7.15. This price translates to a selling price of approximately 2,879.41 yuan/mt at mainstream domestic ports, which is 108.08 yuan/mt lower than the SMM alumina index price, keeping the import arbitrage window open.

Summary: Overall, the alumina market maintained a surplus pattern during the period. Supply side, domestic operating capacity for alumina remained high recently, with weekly production flat compared to the previous week, coupled with the continued opening of the import arbitrage window. Although alumina profit margins were compressed, no production cuts by alumina refineries have been reported so far. Demand side, alumina raw material inventory at aluminum smelters stood at 2.938 million mt, continuing to build up, indicating insufficient purchasing enthusiasm for spot alumina from smelters. So far, alumina refineries still had profits in September compared to the average online price, but with the average monthly price declining starting October, some high-cost enterprises are expected to incur losses, likely leading to some production cuts and maintenance. Overall, spot alumina prices are expected to continue their downward trend in the short term. [Except for publicly available information, other data are processed by SMM based on public information, market communication, and SMM's internal database model, for reference only and do not constitute decision-making advice.]