SHANGHAI, Apr 18 (SMM) - As of last Friday, the SMM weighted alumina index stood at 2,994 yuan/mt, up 5 yuan/mt from a week ago. The prices stood between 2,920-3,030 yuan/mt in Shandong, 3,000-3,050 yuan/mt in Henan, 2,950-2,980 yuan/mt in Shanxi, 2,960-3,020 yuan/mt in Guangxi, 3,000-3,050 yuan/mt in Guizhou, and 3,150-3,200 yuan/mt in Bayuquan.
As of last Friday, the alumina prices FOB Western Australia stood at $385/mt, erasing all the gains since early February. Considering that the export window has virtually closed, the monthly export volume may be lower than the previous forecast of 150,000-200,000 mt, and the domestic alumina prices will be under pressure.
The market performance of main alumina producing regions in China diverged. Shanxi escalated its pandemic control measures and shut down some highway sections in Xiaoyi, which has hindered the cross-province transportation of raw materials and finished products for local alumina refineries and will threaten future production. Transport by truck has basically stagnated in Shanxi, while only a small amount of alumina can be shipped by railway. In response to hindered shipments from Shanxi, aluminium smelters in north-west China began to seek alumina from Henan, giving a slight boost to local prices. The prices in Guizhou and Guangxi were firm as rigid demand increased significantly amid active production resumption by aluminium smelters in Yunnan.
SMM believes that increasing demand in south-west China and regional supply-demand imbalance in north China caused by the pandemic will give certain support to the short-term alumina prices. In the long run, it is still necessary to closely watch whether exports and the increase in domestic demand will be able to digest alumina from newly commissioned capacity. If the market shifts to an oversupply, alumina prices will fall to near breakeven points.
