China's alumina price instability vs aluminium production scene raises question about FY26 plans

Alumina's prices, without much surprise, follow the upward path of the price range on Tuesday, October 22. As disclosed by SMM, the average alumina price is RMB 4,698 per tonne, which is 56 per cent higher than last year's October 23 price (RMB 2998 per tonne).

The Y-o-Y price leap has caused a frown in many, as doubt remains about how China maintains its alumina export relations with Russia if the country itself is suffering due to Guinea's bauxite export issues.

The provincial alumina prices (regions where the price inflation was reflected) in the Chinese Metals Market on Tuesday ranged between RMB 4,400 per tonne and RMB 4,870 per tonne. Meanwhile, Shandong and Henan saw an average price of RMB 4,725 per tonne, and Shanxi, Guizhou, and Guangxi saw an average price of RMB 4,785, RMB 4,550 and RMB 4,650 per tonne, respectively.

A00 aluminium ingot prices overall have dropped slightly with a range of RMB 20,720-20,760 per tonne (average price RMB 20,740 per tonne) The spot contract is to be traded on Tuesday with a discount of RMB 10 to a premium of RMB 30 per tonne.

Contradictory to Monday's pricing, the average A00 aluminium ingot pricing declined in most provinces, with prices depicted as: RMB 20,750 per tonne (-50) in Gongyi, RMB 20,520 per tonne (-60) in Foshan, RMB 20,750 per tonne (-50) in Wuxi, RMB 20,750 per tonne (-40) in Hangzhou, RMB 20,630 per tonne (-60) in Chongqing, RMB 20,660 per tonne (-30) in Shenyang, RMB 20,690 per tonne (-50) in Tianjin and RMB 20,720 per tonne (-70) in Linyi. The price range in the provinces varies between RMB 20,500 per tonne to RMB 20,770 per tonne.

The high-purity aluminium ingot prices of 99.99 per cent and 99.96 per cent variants are RMB 27,800 per tonne (range RMB 27,400-28,200 per tonne) and RMB 28,800 per tonne (range RMB 28,400-29,200 per tonne) without any further change to yesterday's price.

As for aluminium alloys, other than A356 (the rate dipped RMB 50, with a final Tuesday sum of RMB 21,200 per tonne), ADC12, A380, and A360 variants remain unchanged.

2024 in a sneak peek

This is the third time in the ongoing calendar year that China's alumina price has seen volatility: first in January due to Guinea's bauxite supply issues and second in May due to Rio Tinto's declaration of force majeure on third-party shipments from its alumina refineries in Queensland due to limited gas supplies. China faces difficulties again at present as Guinea's bauxite supply is under an embargo.

Additionally, environmental inspections have caused multiple domestic bauxite mines to suspend operations early in the year, which has constrained alumina production growth.

The surge in aluminium production in most Chinese provinces despite the country's alumina import/production crisis raises the question of whether the enterprises have planned ahead of the demand or have a plan for the probable surplus next year (2025).