Supply-Demand Imbalance Persists, Spot Prices Under Pressure [SMM Alumina Morning Comment]

SMM Alumina Morning Comment 9.30
Futures:The most-traded alumina 2601 contract opened at 2,901 yuan/mt overnight, hit a high of 2,909 yuan/mt and a low of 2,872 yuan/mt, and finally closed at 2,878 yuan/mt, down 26 yuan/mt or 0.9%, with open interest at 304,000 lots.

Ore side:As of September 29, the SMM imported bauxite index was reported at $74.84/mt, down $0.02/mt from the previous trading day; the SMM average CIF price for Guinean bauxite was reported at $73.5/mt, flat from the previous day; the SMM average CIF price for Australian low-temperature bauxite was reported at $70/mt, flat from the previous day; the SMM average CIF price for Australian high-temperature bauxite was reported at $61.5/mt, flat from the previous day; the SMM average CIF price for Malaysian bauxite was reported at $50.5/mt, flat from the previous day; the SMM average CIF price for Malaysian bauxite (washed) was reported at $63/mt, flat from the previous day. Overall, for domestic bauxite, spot alumina prices continued to decline, compressing alumina refinery profits in the region. Although the supply pressure for northern bauxite has eased compared to earlier periods, supply in 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 high absolute inventory levels, bauxite prices are expected to remain in the doldrums in the short term.

Industry News:
1) China Railway Group and India's Ashapura Minechem Limited are cooperating to develop two bauxite mines in Guinea covering a total area of over 200 square kilometers, with estimated total reserves exceeding 200 million mt. According to the agreement, China Railway will be responsible for the construction and operation of mining, logistics, and port infrastructure, aiming to increase production and boost local economic growth by creating jobs and improving infrastructure.
2) Iran is set to launch the $1 billion Parsian Alumina Project, which is expected to have an annual capacity of 1 million mt, far exceeding its existing domestic capacity of 240,000 mt. The project is equipped with a dedicated port, aiming to significantly reduce Iran's reliance on alumina imports and consolidate its position as a leading aluminum producer in West Asia.

Spot Prices:As of September 29, 2025, the SMM Alumina Index was reported at 2,982.34 yuan/mt, down 8.83 yuan/mt MoM; the SMM Shandong Alumina Index was reported at 2,885 yuan/mt, down 15 yuan/mt MoM; the SMM Henan Alumina Index was reported at 2,965.29 yuan/mt, down 9.65 yuan/mt MoM; the SMM Shanxi Alumina Index was reported at 2,923.76 yuan/mt, down 6.49 yuan/mt MoM; the SMM Guizhou Alumina Index was reported at 3,136.96 yuan/mt, down 8.19 yuan/mt MoM; the SMM Guangxi Alumina Index was reported at 3,118.59 yuan/mt, down 4.41 yuan/mt MoM. A spot transaction was inquired yesterday, where an aluminum smelter in Northwest China procured 10,000 mt of spot alumina via a regular tender, with the mainstream winning delivery-to-factory price at 3,190-3,200 yuan/mt, down about 20 yuan/mt from the previous period.

Spot-Futures Price Spread Daily Report:According to SMM data, on September 29, the SMM Alumina Index was at a premium of 68.34 yuan/mt against the latest transaction price of the most-traded contract at 11:30.

Warrant Daily Report:On September 29, the total registered volume of alumina warrants increased by 10,548 mt from the previous trading day to 159,800 mt. The total registered volume of alumina warrants in Shandong remained unchanged from the previous trading day at 0; the total registered volume in Henan remained unchanged at 0; the total registered volume in Guangxi remained unchanged at 0; the total registered volume in Gansu remained unchanged at 0; the total registered volume in Xinjiang increased by 10,548 mt from the previous trading day to 159,800 mt.

Overseas Market:As of September 29, 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 7.14. This price translates to a selling price of about 2,879.37 yuan/mt at mainstream domestic ports, which is 102.97 yuan/mt lower than the SMM Alumina Index price, keeping the import 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 WoW, coupled with the persistently open import window; although alumina profit margins are being compressed, no production cuts by alumina refineries have been heard of yet. Demand side, raw material inventories at aluminum smelters remain high, and spot procurement enthusiasm from alumina refineries is currently insufficient. So far, alumina refinery costs in September still allow for profit compared to the monthly average price, but with the monthly average price declining starting October, some high-cost enterprises may incur losses, and some production cuts and maintenance are expected. Overall, spot alumina prices are expected to continue their downward trend in the short term. [Except for public information, other data are derived by SMM based on public information, market communication, and SMM's internal database model, for reference only and not constituting decision-making advice.]