Export window closes, alumina prices under pressure

In the overnight session, the most-traded alumina 2505 futures contract opened at RMB 3,330 per tonne, reached a high of RMB 3,337 per tonne and a low of RMB 3,302 per tonne, and finally closed at RMB 3,313 per tonne, down 0.51 per cent. Open interest increased by 73,860 lots to 183,000 lots. Regarding spot alumina prices, on March 4, SMM alumina was quoted at RMB 3,381 per tonne, flat compared to the previous trading day.

Ore Market: As of March 4, the SMM imported bauxite index stood at $95.11 per tonne, unchanged from the previous trading day. The SMM Guinea bauxite CIF average price was $93 per tonne, and the SMM Australian bauxite CIF average price was $91 per tonne, both unchanged from the previous trading day.

Industry News:

1. In January, South32's Mozal smelter in Mozambique experienced a temporary 3 per cent reduction in aluminum production capacity due to domestic unrest. Although emergency measures alleviated raw material inventory issues, South32 temporarily withdrew its full-year production guidance for Mozal due to uncertainties. In February, South32 released its FY25 H1 report, reinstating production guidance for the smelter, with FY25 (July 1, 2025–June 30, 2026) share production expected at 350,000 tonnes, down 10,000 tonnes from the initial guidance (South32 holds a 63.7 per cent stake).

2. Rio Tinto's New Zealand Aluminum Smelters (NZAS) agreed to delay the restart of the Tiwai Point aluminum smelter until August 31 at the latest to ensure Meridian Energy can secure 50 MW of power supply during this winter.

3. Indonesia recently launched a new sovereign wealth fund, Daya Anagata Nusantara (Danantara), with an initial investment of $20 billion. The fund focuses on over 20 key projects, including bauxite, nickel, and copper processing, artificial intelligence, refining, renewable energy, and food production.

4. Arrow Minerals Limited is advancing its Niagara bauxite project in Guinea, with the first resource report expected in March and a mining scope study to be completed by June.

5. Yongtai Energy stated on March 3 via its investor interaction platform that its coal mines currently contain abundant bauxite resources, but no rare earth resource exploration has been conducted yet.

6. The Guangxi Investment Group Beihai Green Ecological Aluminum Project, a major project in Guangxi, is progressing steadily. The overall progress of Phase I has reached 75 per cent, with the calcination and dissolution-settling processes for aluminum hydroxide exceeding 90 per cent. The project is expected to be completed and put into operation in Q3, 30 days ahead of schedule, with major processes entering individual trial runs soon. Meanwhile, the supporting Berth 19 terminal project has reached 95 per cent completion, with dredging works totalling 3.09 million m³, achieving 90 per cent of the total dredging volume. The terminal is expected to be operational by July.

Spot-Futures Price Spread Daily Report: According to SMM data, on March 4, the SMM alumina index showed a premium of RMB 57 per tonne against the most-traded contract's latest transaction price at 11:30.

Warehouse Warrant Daily Report: On March 4, the total registered warehouse warrants for alumina increased by 18,317 tonnes from the previous trading day to 143,800 tonnes. In Shandong, the total registered warehouse warrants remained unchanged at 4,513 mt. In Henan, they decreased by 1,800 mt to 16,800 tonnes. In Guangxi, they increased by 20,117 tonnes to 20,117 tonnes. In Gansu, they remained unchanged at 6,616 tonnes. In Xinjiang, they also remained unchanged at 9.58 tonnes.

Overseas Market: As of March 4, the FOB Western Australia alumina price was $472 per tonne, with ocean freight at $19.75 per tonne. The USD/CNY exchange rate selling price was around 7.30, translating to an external selling price of approximately RMB 4,137 per tonne at major domestic ports, RMB 756 per tonne higher than domestic alumina prices. The alumina import window remains closed.

Summary: Recently, domestic spot alumina prices have stabilized, mainly due to increased export and delivery warehouse demand, which has supported alumina prices. In the short term, spot alumina prices in some regions have rebounded slightly. However, overseas alumina prices have declined, and the export window remains largely closed. Delivery warehouse demand is not sustainable, and the market expects some new alumina capacity to be gradually commissioned. In the medium and long term, spot alumina prices remain under pressure. In the short term, spot alumina prices may enter a phase of fluctuation and adjustment. Continuous attention should be paid to alumina export profitability and bauxite price changes.

Information source: https://news.metal.com/newscontent/103207794/Export-Window-Closes-Alumina-Prices-Under-Pressure-[SMM-Alumina-Morning-Comment]