Alumina Supply Surplus In China Is Far Below Previously Predicted

SHANGHAI, Jun 13 (SMM) – Only one deal was heard in Shanxi, where one trader sold 10,000 mt of alumina to an aluminium smelter in Gansu at 2,780 yuan/mt. After falling for one quarter, the decline in alumina prices slowed down last week thanks to expectations for aluminium production resumption in Yunnan that would buoy alumina demand. According to SMM survey, hydropower generation in Yunnan has picked up in June, which might enable local aluminium capacity to be partially resumed in late June, thereby easing alumina suppliers’ pessimism to a certain extent. The domestic output of metallurgical-grade alumina was 6.682 million mt in May, which plus estimated net import of 80,000 mt, created a supply surplus of 78,000 mt, far below 200,000 mt of supply overhang predicted earlier. Extensive maintenance by alumina refineries across Shandong, Chongqing and Guizhou in May prevented the oversupply from worsening. In addition, the output release of new alumina projects in Shandong and Gungxi slowed down amid alumina price downturn. Therefore, alumina available in the market was mainly held by traders and with few sell-offs by refineries being reported.