China’s Exports of Alumina May Increase Rapidly on Opened Export Window

SHANGHAI, Mar 18 (SMM) - On March 17, the transaction of 30,000 mt of alumina was made at $527/mt FOB, which was $2/mt higher than in Indonesia on March 16. The goods will be shipped in late April. The price has risen by 39% from early February, and China’s export window has been expanded to 1,400 yuan/mt.

The price difference at home and abroad widened again, which significantly suppressed the procurements by domestic aluminium smelters and traders. Only the goods under long-term orders and the alumina for the production of high-purity aluminium will flow into the domestic market. China’s imports of alumina will be far lower than in previous years due to the closed import window.

China has seen alumina exports recently, but the amount is small, mainly due to the following reasons.

1. The recurring COVID-19 pandemic impeded the logistics. Since March 16, 2022, Bayuquan area in Liaoning province banned all vehicles from passing in the street, expect for the special vehicles performing tasks, medical treatment vehicles, vehicles for guaranteeing people's livelihood, material distribution vehicles, emergency vehicles, and other vehicles holding a pass.  

Citizens have been asked not to leave home.

The pandemic in the major port area affected the exports of alumina.

2. The unstable geopolitics caused the surging prices of crude oil. The ocean freight from western Australia to domestic ports soared from $42/mt in early February to $75-80/mt, and the ship was few. It cut part of the export profits, and the market turned wait-and-see.

3. Due to the different settlement methods and potential sanction linkage by US and European, the traders have been very cautious in multi-party transactions of alumina.

Since a large number of new alumina capacities have been put into production, the supply is expected to turn to surplus, and the spots available in the market will increase sharply. As such, the export supply is abundant.

The alumina refineries in Ireland and east Australia may cut the production  due to the unstable geopolitical situation and high energy costs, which will intensify the overseas supply shortage. China’s exports may increase rapidly amid wide price spread.