China's alumina price gains another RMB51/t: Trend shows continual price surge

On October 18, Friday, the week has closed with a continuous upward price trend in alumina. As a matter of fact, most other aluminium commodities have seen a downward price except for alumina.

Alumina has gained another RMB 51 per tonne, soaring to a new high of RMB 4607 (USD 647) per tonne. In the provinces, Shandong and Guizhou stands at RMB 4,600 per tonne (range RMB 4,550-4,650) and RMB

4,440 per tonne (ranging between RMB 4,330 and 4,550), with RMB 50 added to yesterday's prices in both provinces. In Henan, Shanxi and Guangxi, the prices of alumina gained another RMB 75, totalling an average of RMB 4625, RMB 4700, and RMB 4575 per tonne, respectively.

The bauxite supply disruption from Guinea due to weather challenges has been aggravated by the Guinean customs blockade resulting in continuous price surge of alumina in China.

"We can confirm that bauxite exports from Guinea Alumina Corporation (GAC) are currently suspended customs. We are seeking clarity from Customs regarding the reason for these actions and are working to resolve this issue as quickly as possible," GAC owner Emirates Global Aluminum official stated to the media.

In December 2022, Indonesia declared it would ban bauxite exports from June 2023 to boost its domestic processing and refining drive.

"The government is committed to realising sovereignty over natural resources and increasing added value in the country, especially with regard to providing as many jobs as possible and increasing foreign exchange, as well as achieving more equitable economic growth," Indonesian President Joko Widodo conveyed during the announcement. Since then, Guinea has been China's primary supplier of alumina with imports doubling between 2000 and 2023 to almost 100 million tonnes and were up by another 13 per cent in the first eight months of this year.

Speculations of Guinea following the path of Indonesia ignited when GAC signed a deal with the West African nation for the construction of a major alumina refinery—the country's second after the Friguia refinery owned by Moscow-based Rusal (MCX:RUAL), which also operates two bauxite mines.

However, even due to the constraints now, as anticipated, aluminium smelters in Yunnan province will not limit production until the end of this year, given good water availability resulting in ample hydropower supply. This means they can continue to ramp up production during a period of good profitability.

On the other hand, China doesn't seem to be short of alumina since it continues to export significant quantities to Russia. Exports to Russia hiked 41% Y-o-Y to 1 million tonnes from January to April, turning China from a net importer to a net exporter of the intermediate product.

Aluminium Ingot

On the contrary, A00 aluminium ingot lost 260 RMB per tonne, priced on average at RMB 20,500 per tonne, whereas low carbon aluminium lost RMB 252 per tonne, standing at RMB 21,396 per tonne. The prices in the provinces dipped between RMB 220 and RMB 270 per tonne, with a range of RMB 20,320 and RMB 20,550 per tonne. High-purity aluminium ingot (both 99.99 per cent and 99.96 per cent) lost RMB 300 per tonne priced at RMB 27,500 and RMB 28,500 per tonne respectively.

ADC12 and A380 lost RMB 100 per tonne (averagely priced at RMB 20,800 per tonne and RMB 21,800 per tonne, respectively), while A356 and A360 lost RMB 250 per tonne (averagely priced at RMB 20,950 per tonne and RMB 21,100 per tonne, respectively).