Spot alumina prices accelerate decline; Bauxite suppliers' quotations pull back to some extent

Since mid-to-late October 2024, imported bauxite prices have accelerated their rise, with bulk transaction prices surging from US$75-77 per tonne to a peak of US$128-130 per tonne. However, recently, spot alumina prices have accelerated their decline. As of this Thursday, aluminium smelters in north-west China tendered for 5,000 mt of spot alumina, equivalent to an ex-factory price of 3,800 yuan per tonne in Shanxi; in Henan, 8,000 mt of spot alumina were transacted at a price of 4,050 yuan per tonne. The profit margin for alumina refineries has significantly narrowed, putting pressure on the peak of bauxite prices, and suppliers' quotations have shown a certain degree of pullback.

Image Source: Made in China

For alumina refineries in Shanxi and Henan, according to SMM's simple calculations, if Guinean bauxite is used as raw material, with a CIF price of US$100 per tonne for Guinean bauxite and a delivery-to-factory price of caustic soda at 2,980-3,080 yuan per tonne, the full cost of alumina production is approximately 3,900-4,000 yuan per tonne. If the CIF price of Guinean bauxite rises to US$120 per tonne while other conditions remain unchanged, the full cost of alumina production would be around 4,300-4,400 yuan per tonne.

Currently, the latest transaction prices for spot alumina in Shanxi and Henan have fallen to levels near the full cost of producing alumina using Guinean bauxite priced at $100/mt, significantly reducing alumina refineries' willingness to accept high-priced bauxite. According to SMM, recent quotations from bauxite suppliers are around US$110-125 per tonne, but no actual transactions have been reported. In the short term, bauxite may enter a tug-of-war between sellers and buyers, and the future price trend of bauxite will depend on the latest bulk transaction price guidance.

(The above information is based on market collection and comprehensive evaluation by the SMM research team. The information provided in this article is for reference only and does not constitute direct investment research advice. Clients should make prudent decisions and not replace independent judgment with this information. Any decisions made by clients are unrelated to SMM.)

Source: SMM