Geopolitical Risks and Energy Pressure Coexist, with Ex-China Metallurgical-Grade Alumina June Production Down About 6% YoY[SMM Analysis]

Published: Jun 30, 2026 18:44

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SMM, June 30:

According to SMM statistics, total production of metallurgical-grade alumina outside China in June 2026 fell about 6.0% YoY and about 5.5% MoM. In June, supply-side disruptions in the alumina market outside China became more pronounced compared with May. On one hand, due to the situation in the Middle East, production and shipment paces at some enterprises had not yet fully recovered; on the other hand, weather and natural gas supply disruptions in Australia persisted, weighing on local alumina production and shipments.

By enterprise and region, Alcoa said that, due to the impact of the earlier Cyclone Narelle in Australia, the LNG supply to its Pinjarra alumina refinery in Western Australia was temporarily disrupted. It expected Q2 alumina shipments to be about 120,000 mt lower than in Q1, and the related disruption was expected to push up Q2 production costs by approximately $30 million. In addition, due to the Middle East situation, fuel costs at the company's São Luís alumina refinery in Brazil also rose. Currently, Alcoa's Western Australian alumina operations are still facing multiple pressures, including weak alumina prices, declining bauxite grades, and rising energy costs, and its overall operations are clearly under pressure.

In Europe, geopolitical risks continued to escalate. In June, during discussions on a new round of EU sanctions against Russia, the issue of alumina exports from Aughinish Alumina in Ireland to Russia continued to attract attention. Public reports indicated that the latest EU sanctions package did not yet include alumina exports within its restrictions, but if sanctions are further tightened later, it could affect alumina trade flows and the regional supply landscape in Europe.

Since June, with the arrival of some Malaysian bauxite, raw material supply at some local alumina refineries has improved, leaving some room for production recovery, but issues related to bauxite export quotas in Indonesia and logistics stability still require close monitoring.

Additionally, in June, Tajikistan and Azerbaijan explored cooperation on alumina supply and aluminum product trade, under which Azerbaijan plans to supply alumina to Tajikistan and Tajikistan would export aluminum products to Azerbaijan. This cooperation will have limited impact on alumina production outside China in the near term, but it reflects that regional aluminum industry chain coordination and trade flow adjustments are still advancing.

Looking ahead to July, metallurgical-grade alumina supply outside China is expected to see a recovery-driven increase, with production rebounding about 4.5% MoM. On one hand, with the arrival of bauxite at ports, raw material constraints at some Indonesian alumina refineries have eased, and output is expected to gradually recover; on the other hand, weather and natural gas supply disruptions in Australia are easing marginally, and earlier affected production and shipment paces may recover. However, geopolitical risks in the Middle East, uncertainty over EU sanctions against Russia, cost pressure from energy in Australia, and Indonesia's bauxite quota issues may still disrupt the supply recovery outside China. Overall, alumina production outside China is expected to rebound slightly in July, but supply-side uncertainty remains high.

(The above information is derived from market data collection and a comprehensive evaluation by the SMM research team. The information provided in this article is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make decisions cautiously and should not use this to replace their own independent judgment. Any decisions made by clients are not related to SMM.)

Data source: SMM

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

Images in this article contain AI-translated captions for reference only.

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