High Costs vs. Inventory at High Levels, Spot Prices in Regional Supply-Demand Mismatch Segments Expected Under Pressure [SMM Alumina Morning Comment]

7.17 SMM Alumina Morning Comment

Futures:

On the night of July 17, the most-traded alumina 2609 night session futures contract opened at 2,681 yuan/mt, rose to a high of 2,694 yuan/mt, fell to a low of 2,675 yuan/mt, and finally closed at 2,691 yuan/mt, down 16 yuan/mt, or 0.59%, from the previous trading day’s settlement price. Trading volume was 82,600 lots, open interest stood at 375,800 lots, up 8,623 lots day on day. From a technical perspective, the price is trading below the MA5 (2,691.80) and also below the MA10 (2,703.10), MA30 (2,795.43), and MA60 (2,804.62), with the medium- and long-term moving averages maintaining a bearish stance. On the MACD front, the DIF (-39.15) is below the DEA (-33.91), and the MACD histogram recorded -10.48, showing that bearish momentum still dominates. However, the negative histogram continued to narrow from the previous trading day, indicating that bearish momentum is weakening. Overnight, alumina futures drifted lower and again lost the 2,700 yuan/mt level, accompanied by an increase in open interest, signaling that bears are still entering the market. In the short term, futures are likely to remain weak. Attention should be paid to support near 2,660 yuan/mt and changes in capital flows.

Ore:

As of July 16, 2026, the SMM imported bauxite index stood at $70.36/mt, flat from the previous trading day; the SMM Guinea bauxite FOB average price was $39/mt, flat; the SMM Guinea bauxite CIF average price was $70.5/mt, flat; the SMM Australian low-temperature bauxite CIF average price was $64/mt, flat; the SMM Australian high-temperature bauxite CIF average price was $58.5/mt, flat; the Malaysian bauxite CIF average price was $52/mt, flat; the Malaysian bauxite CIF (washed) average price was $62.5/mt, flat; the Ghana bauxite CIF average price was $78/mt, flat; and the bauxite CFR Turkey price was $78.5/mt, flat.

Overall, on the domestic ore front, mines in Shanxi, Henan, and other areas are gradually resuming operations. Alumina refineries continue to push for lower ore purchase prices, and domestic ore prices remain generally in the doldrums. On the imported ore front, ocean freight rates stay high, and ongoing policy uncertainty in Guinea provides some support for ore prices. However, China’s alumina refineries still hold high raw material inventories, limiting their buying interest, and price negotiations in the market persist. Imported ore prices are expected to continue to consolidate at highs in the short term. Going forward, close attention should be paid to Guinea’s bauxite quota policy and changes in Australia-China ocean freight rates.

Spot prices:

As of July 16, 2026, the SMM Alumina Index stood at 2,730.17 yuan/mt, down 5.18 yuan/mt from the previous trading day; the SMM Shandong Alumina Index stood at 2,736.66 yuan/mt, down 7.5 yuan/mt from the previous trading day; the SMM Henan Alumina Index stood at 2,764.75 yuan/mt, down 4.87 yuan/mt from the previous trading day; the SMM Shanxi Alumina Index stood at 2,772.50 yuan/mt, down 7.22 yuan/mt from the previous trading day; the SMM Guizhou Alumina Index stood at 2,735.04 yuan/mt, down 0.8 yuan/mt from the previous trading day; the SMM Guangxi Alumina Index stood at 2,642.70 yuan/mt, down 3.25 yuan/mt from the previous trading day.

Daily spot-futures spread:

According to SMM data, on July 16 the SMM Alumina Index showed a discount of 37.17 yuan/mt to the latest traded price of the most-traded contract as of 11:30.

Daily warrant report:

On July 16, total registered alumina warrants stood at 276,400 mt, up by 7,483 mt from the previous trading day; total registered alumina warrants in Shandong stood at 30,908 mt, unchanged from the previous trading day; Henan stood at 1,802 mt, unchanged; Guangxi stood at 12,941 mt, unchanged; Gansu stood at 14,403 mt, unchanged; Xinjiang stood at 216,300 mt, up by 7,483 mt from the previous trading day.

Markets outside China:

As of July 16, 2026, the FOB Western Australia alumina price stood at $328/mt, unchanged from the previous trading day; the Australia-China ocean freight rate stood at $32.35/mt, up $1.2/mt from the previous trading day; the USD/CNY selling rate stood at 6.7837. Based on this calculation, the equivalent domestic mainstream port selling price for seaborne alumina was about 2,842.29 yuan/mt, which was 112.12 yuan/mt above the SMM Alumina Index that day.

Summary:

China's total alumina inventory edged up MoM, with little overall change. By segment, raw material inventory at aluminum smelters declined, mainly because current spot alumina prices stayed high, prompting some smelters to actively reduce high-priced in-factory inventory and leading to lower raw material stockpiling; in-factory inventory at alumina refineries edged up, as maintenance-related production cuts in Shanxi were offset by production increases in south China, resulting in relatively limited overall changes. At ports, new vessel arrivals gradually added to port inventory; warrant inventory showed a downtrend, affected by invoicing issues and the spot-futures spread, which weakened the willingness to ship to delivery warehouses; in-transit and station inventory accumulated, mainly because warrants gradually expired, converting to spot cargoes, while shipments from Guangxi continued, increasing in-transit cargoes. The operating pattern of alumina is expected to see little change this week. Some enterprises using domestic ore may schedule maintenance due to ore supply issues, but the impact on monthly production will be limited, and overall inventory will remain at current levels. Price side, as the regional alumina mismatch issue gradually eases, the spot price center is expected to pull back, and the subsequent trend will be under pressure.

[Data other than public information are all 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.]