SMM: Domestic alumina continues net export, spot prices continue to decline

In the Futures Market, during the night session, the most-traded alumina 2502 futures contract opened at RMB 3,832 per tonne, reached a high of RMB 3,861 per tonne and a low of RMB 3,804 per tonne, and finally closed at RMB 3,838 per tonne, down RMB 36 per tonne or 0.94 per cent. Open interest stood at 72,300 lots. As for Spot alumina transactions, in Shandong, 3,000 tonnes of spot alumina were traded at a transaction price of RMB 3,940 per tonne.

According to Bloomberg, on January 20, 2025, the London Metal Exchange (LME) approved Hong Kong as a warehouse location for the first time, aiming to strengthen ties with the world's largest metals market—mainland China. The Hong Kong warehouse will allow storage of major LME base metals, including copper, zinc, and aluminium, and will be put into use within three months after the first warehouse company and location are approved.

According to China's General Administration of Customs, in December 2024, China imported 14.976 million tonnes of bauxite, up 21.9 per cent M-o-M and 26.2 per cent Y-o-Y. By country, imports from Guinea were 10.386 million tonnes (up 36.7 per cent M-o-M, 26.3 per cent Y-o-Y), and imports from Australia were 3.389 million tonnes (down 8.29 per cent M-o-M, up 6.93 per cent Y-o-Y). From January to December 2024, China cumulatively imported 158.767 million tonnes of bauxite, up 12.3 per cent Y-o-Y.

By country, imports from Guinea totalled 110.207 million tonnes, accounting for 69.41 per cent of total imports (up 11.2 per cent Y-o-Y); imports from Australia totalled 39.884 million tonnes, accounting for 25.12 per cent of total imports (up 15.4 per cent Y-o-Y); non-mainstream bauxite imports totalled 8.676 million tonnes, accounting for 5.46 per cent of total imports, up 47.9 per cenr compared to 2023 non-mainstream bauxite imports (excluding Indonesian imports).

According to Chinese customs data, in December 2024, China exported 188,300 tonnes of alumina, with cumulative exports from January to December 2024 reaching 1.7857 million tonnes. Alumina imports in December 2024 were 15,300 tonnes, down 84.6 per cent M-o-M and 94.3 per cent Y-o-Y, with cumulative imports from January to December 2024 totalling 1.4199 million tonnes, down 2.3 per cent Y-o-Y. Net alumina exports in December were 173,000 tonnes, with cumulative net exports from January to December 2024 reaching 365,800 tonnes.

According to data from January 17, the weekly port arrivals of bauxite at domestic ports totalled 2.69 million tonnes, down 1.54 million tonnes from the previous week. Weekly port departures of bauxite from Guinea's main ports totalled 3.88 million tonnes, up 1.55 million tonnes from the previous week, while weekly port departures from Australia's main ports totalled 900,000 tonnes, up 40,000 tonnes from the previous week.

According to SMM data, as of 11:30 on January 20, the SMM alumina index showed a premium of RMB 519 per tonne against the most-traded contract's latest transaction price.
On January 20, the total registered warehouse warrants for alumina decreased by 1,792 tonnes from the previous trading day to 41,500 tonnes. In Shandong, the total registered warehouse warrants remained unchanged at 901 tonnes; in Henan, they remained unchanged at 12,000 tonnes; in Guangxi, they remained unchanged at 0; in Gansu, they remained unchanged at 0 tonne; and in Xinjiang, they decreased by 1,792 tonnes to 28,600 tonnes.

As of January 20, FOB Western Australia alumina prices were $573 per tonne, with ocean freight rates at $20.9 per tonne. The USD/RMB exchange rate selling price was around 7.33. These prices translate to an external selling price of approximately RMb 5,002 per tonne at major domestic ports, RMB 597 per tonne higher than domestic alumina prices, keeping the alumina import window closed.

Recently, the weekly operating rate of alumina has continued to increase slightly, with no significant changes on the demand side. Low-priced spot transactions have been frequent in the market, with a larger decline compared to earlier periods. In Henan, spot transaction prices on Thursday were RMB 4,050 per tonne, down RMB 830 per tonne from last Thursday's price of RMB 4,880 per tonne.

However, as of now, alumina capacity has not entered a large-scale loss-making state. Alumina supply is expected to maintain a high operating rate in the short term, with a slight surplus in the supply-demand fundamentals. Overall, spot alumina prices are expected to continue their downward trend in the short term. Close attention should be paid to bauxite transaction prices, alumina costs, and overseas spot alumina prices in the near term.

Source: SMM