Alumina Grinds Lower on Shrinking Volume, Breaking Below Short-Term Moving Averages; Spot Alumina in the Doldrums; Prices Outside China Continue to Strengthen [SMM Alumina Morning Comment]

7.24 SMM Alumina Morning Comment

Futures: The most-traded alumina 2609 contract continued to consolidate on a weak note overnight, opening at 2,702 yuan/mt before edging up to 2,709 yuan/mt and then encountering resistance and pulling back. It hit an intraday low of 2,685 yuan/mt before closing at 2,691 yuan/mt, with an overall trading range of just 24 yuan/mt. The futures lacked clear directional drivers. Trading volume shrank notably, decreasing by 51,179 lots from the previous session to 83,585 lots, with volume contracting to recent lows. Market willingness to trade was subdued, and wait-and-see sentiment was strong. However, open interest increased by 10,735 lots against the trend to 313,000 lots, signaling greater divergence in positioning. Bears may have initiated new positions at these levels, suggesting the market remains cautious about the outlook. From a technical perspective, the closing price of 2,691 yuan/mt has broken below the three short-term moving averages—MA5 (2,707.4), MA10 (2,707.4), and MA20 (2,703.75)—while MA5 and MA10 have converged and flattened before turning lower. The short-term moving average system shows signs of forming a bearish alignment, and the price center continued to drift slightly lower. The overhead MA40 (2,726.62) is declining, indicating clear medium-term resistance. Currently, the futures display bearish characteristics of “shrinking volume grinding lower, breaking below short-term moving averages, and counter-trend open interest increase.” Although bearish momentum has not been fully unleashed, the price center has been gradually shifting lower. Overall, if volume remains subdued and the 2,700 yuan/mt level cannot be reclaimed, prices may seek further downside support in the short term. On the downside, watch support around 2,680 yuan/mt and the prior low of 2,650 yuan/mt, while resistance is seen at the 2,700 round number and near MA5 (2,707.4).

Ore: As of July 23, 2026, the SMM Imported Bauxite Index stood at $70.36/mt, flat from the previous trading day. The SMM Guinea bauxite FOB averaged $39/mt, unchanged; the SMM Guinea bauxite CIF averaged $70.5/mt, unchanged; the SMM Australia low-temperature bauxite CIF averaged $64/mt, unchanged; the SMM Australia high-temperature bauxite CIF averaged $58.5/mt, unchanged; the Malaysian bauxite CIF averaged $52/mt, unchanged; the Malaysian bauxite CIF (washed) averaged $62.5/mt, unchanged; the Ghanaian bauxite CIF averaged $78/mt, unchanged; and the Turkish bauxite CFR averaged $78.5/mt, unchanged. Overall, on the domestic ore front, mines in Shanxi, Henan and other regions are gradually resuming operations. Alumina refineries continue to push for lower purchase prices, keeping domestic ore prices largely in the doldrums. Imported ore prices side, ocean freight rates stayed high, coupled with policy uncertainty in Guinea, providing some support for ore prices. However, raw material inventories at domestic alumina refineries remained high, procurement appetite was limited, and market price bargaining continued. In the short term, imported ore prices are expected to continue to consolidate at highs. Going forward, close attention should still be paid to Guinea's bauxite quota policy and changes in Australia-China ocean freight rates.

Spot Prices: As of July 23, 2026, the SMM alumina index stood at 2,713.37 yuan/mt, down 3.18 yuan/mt; the SMM Shandong alumina index at 2,719.75 yuan/mt, down 2.22 yuan/mt; the SMM Henan alumina index at 2,748.96 yuan/mt, down 2.25 yuan/mt; the SMM Shanxi alumina index at 2,747.50 yuan/mt, down 8.13 yuan/mt; the SMM Guizhou alumina index at 2,730.23 yuan/mt, down 0.8 yuan/mt; and the SMM Guangxi alumina index at 2,629.31 yuan/mt, down 2.13 yuan/mt.

Spot-Futures Spread Daily Report: According to SMM data, on July 23, the SMM alumina index implied a discount of 0.37 yuan/mt against the most-traded contract's latest traded price at 11:30.

Warrant Daily Report: On July 23, total registered alumina warrants stood at 229,700 mt, up 7,463 mt from the previous trading day. Shandong-region alumina warrant registrations totaled 15,574 mt, down 301 mt; Henan-region registrations totaled 298 mt, down 1,504 mt; Guangxi-region registrations totaled 12,941 mt, flat; Gansu-region registrations totaled 18,851 mt, up 5,379 mt; and Xinjiang-region registrations totaled 182,100 mt, up 3,889 mt.

Markets outside China: As of July 23, 2026, the FOB Western Australia alumina price was $342/mt, with an ocean freight rate of $33.05/mt and a USD/CNY selling rate around 6.79. This translates to an ex-mainstream port selling price in China of approximately 2,955.87 yuan/mt, a premium of 242.5 yuan/mt against the alumina index price.

Summary: Alumina prices continued to decline this week, with the downtrend slowing slightly WoW. Futures and spot prices both consolidated at low levels on a weak note, and trading sentiment in the spot market was sluggish. On the supply side, weekly production was basically flat WoW, with stable operations, but the ample supply situation persisted, continuing to weigh on prices. On the inventory front, total alumina inventory in China rose by 24,000 mt WoW to 7.028 million mt, extending the inventory buildup trend. Breaking down by segment: raw material inventory at aluminum smelters edged up by 4,000 mt to 3.38 million mt, with limited overall change; finished product inventories at alumina refineries held steady as enterprises maintained normal production and sales pace; warrant inventory dropped sharply by 48,000 mt to 232,000 mt, mainly due to maturing warrants being converted into spot circulation; port inventory rose by 55,000 mt to 834,000 mt, affected by arrivals from overseas and south China; in-transit and yard inventory increased by 12,000 mt. In markets outside China, earlier low-priced cargoes flowed into China in large volumes amid geopolitical conflicts, depleting overseas circulating inventory; recently, concentrated restocking needs for new capacity in Indonesia and production resumption-related restocking in the Middle East have tightened overseas spot from previously loose conditions, driving a marked rise in ex-China alumina prices. Looking ahead, with China lacking macro bullish drivers and the oversupply pattern continuing to weigh down, spot prices are expected to remain in the doldrums in the near term, and given production ramp-up expectations in Guangxi, inventory will continue to build next week.

[Data other than publicly available information are processed by SMM based on public information, market communication, and SMM's internal database models, for reference only and do not constitute decision-making advice.]