Alumina Prices Show No Signs of Stabilising as Oversupply Persists 

SHANGHAI, May 22 (SMM) - Some alumina refineries in Henan, Guizhou, and Chongqing carried out maintenance last week, which tightened supply in the spot market. This allowed local refineries to hold offers relatively firm. However, the market is still oversupplied. One 1 million mt/year new alumina project in Shandong began to yield output last week, and another 1.2 million mt/year new project in Guangxi will release output later this month. Fears of future supply shock left traders in a rush to sell at lower prices. Aluminium smelters mainly sourced alumina under long-term contracts and refrained from buying from the spot market, unless purchase prices were considerably lower than market prices.

Refineries in Shanxi and Henan returned to loss-making territory after a brief period of profits, denting their production enthusiasm. Alumina prices will remain in a downward trajectory before all new capacity reaches full production. The price downturn may be stemmed if aluminium smelters in Yunnan resume production in the future.