Supply Surplus Pattern Persists, Prices Under Pressure [SMM Alumina Morning Comment]

SMM Alumina Morning Comment 10.15
Futures:The most-traded alumina 2601 futures contract opened at 2,800 yuan/mt overnight, hit a high of 2,806 yuan/mt, touched a low of 2,792 yuan/mt, and finally closed at 2,797 yuan/mt, down 8 yuan/mt or 0.29% from the previous day. Open interest stood at 364,000 lots. Technically, the daily candlestick closed in negative territory, extending the recent downtrend. In terms of moving averages, the MA5 (2,801.20), MA10 (2,804.20), and MA30 (2,823.23) were all above the closing price, forming a resistance pattern. Meanwhile, the MACD indicator continued to operate below the zero axis, with bearish sentiment currently dominating.

Industry News:
1) Vietnam's Duc Giang Chemicals Group plans to invest 58 trillion Vietnamese dong in a bauxite-alumina-aluminum integrated project in Lam Dong province, designed with an annual capacity of 2 million mt of alumina and 500,000 mt of aluminum ingots. The project includes a bauxite-alumina complex in Lam Dong province and an aluminum smelter originally planned for Binh Thuan province, with a construction period from 2025 to 2030.

2) Australia's Camalco plans to invest $447 million to develop bauxite resources in Cameroon, with over 70% of the funds allocated for purchasing railway equipment from China and India to meet transportation needs. Concurrently, the company is seeking to increase its stake in Cameroon Railway Company from 9.1% to 40%, but this plan is reportedly facing opposition from existing shareholders. Although equity negotiations are ongoing, the target remains to achieve production by early 2026, and funds have been allocated for emergency railway repairs.

Ore Side:As of October 14, the SMM imported bauxite index was reported at $74.71/mt, down $0.13/mt from the previous trading day. The SMM Guinea bauxite CIF average price was reported at $73/mt, down $0.5/mt from the previous day. The SMM Australia low-temperature bauxite CIF average price was reported at $70/mt, unchanged from the previous day. The SMM Australia high-temperature bauxite CIF average price was reported at $61.5/mt, unchanged/mt from the previous day. The SMM Malaysia bauxite CIF average price was reported at $50.5/mt, unchanged/mt from the previous day, while the SMM Malaysia bauxite CIF (washed) average price was reported at $63/mt, unchanged/mt from the previous day. A Guinea bauxite transaction was inquired yesterday at a lower price than before, with related enterprises attributing the price decline mainly to a drop in the bauxite's grade. Overall, against the backdrop of high bauxite inventory recently, market feedback indicates that transaction prices in the bauxite spot market still have a downward trend, and imported bauxite prices are expected to hold up well in the short term. Recent heavy rainfall in many parts of China has affected bauxite mining in Henan to some extent; some mining areas in Guangxi reported that bauxite mining remains unaffected, with only waterlogging on mine transport roads currently, and transportation is expected to gradually resume after the weather improves.

Spot Price: As of October 13, 2025, the SMM alumina index stood at 2,952.55 yuan/mt, down 5.63 yuan/mt MoM; the SMM Shandong alumina index was 2,851.06 yuan/mt, down 5 yuan/mt MoM; the SMM Henan alumina index was 2,917.42 yuan/mt, down 11.75 yuan/mt MoM; the SMM Shanxi alumina index was 2,895.19 yuan/mt, down 7.69 yuan/mt MoM; the SMM Guizhou alumina index was 3,099.58 yuan/mt, down 4.76 yuan/mt MoM; the SMM Guangxi alumina index was 3,086.85 yuan/mt, down 4.53 yuan/mt MoM.

Spot-Futures Price Spread Daily Report: According to SMM data, on October 13, the SMM alumina index was at a premium of 145.55 yuan/mt against the latest transaction price of the most-traded contract at 11:30.

Warrant Daily Report: On October 13, the total registered volume of alumina warrants increased by 13,836 mt from the previous trading day to 210,900 mt. The total registered volume of alumina warrants in Shandong remained unchanged at 0 from the previous trading day, in Henan remained unchanged at 0, in Guangxi remained unchanged at 0 mt, in Gansu remained unchanged at 0, and in Xinjiang increased by 13,836 mt from the previous trading day to 210,900 mt.

Overseas Market: As of October 13, 2025, the FOB Western Australia alumina price was $323/mt, the ocean freight rate was $23.85/mt, and the USD/CNY selling rate was around 7.15. This price translates to a selling price of about 2,884.14 yuan/mt at domestic mainstream ports, which is 68.41 yuan/mt lower than the SMM alumina index, keeping the import window open.

Summary: Overall, the alumina market maintained a surplus pattern during the period. Supply side, domestic alumina operating capacity fluctuated at highs recently. Shanxi saw production cuts of 400,000 mt due to rainy season supply issues, but domestic alumina supply surplus pressure persisted. According to SMM model calculations, some high-cost enterprises have entered a loss-making state. However, based on SMM survey, only sporadic northern enterprises have taken production cuts, mainly because although alumina profit margins are compressed, the industry's average cost still allows for profit compared to the average online price, coupled with existing long-term contract delivery demands. As the winter stockpiling season approaches, the enthusiasm for spot procurement among some aluminum plants has increased. However, the overall spot market remains in a state of ample supply. Against the backdrop of high alumina inventory, spot alumina prices are expected to continue their downward trend in the short term. [Data not derived from public sources are processed by SMM based on public information, market communication, and SMM's internal database model, and are for reference only, not constituting decision-making advice.]