Spot alumina prices continue to decline, bauxite prices drop back slightly

This week, domestic bauxite prices dropped back slightly, mainly due to a significant decline in alumina prices. Spot alumina transaction prices in northern regions approached the theoretical marginal cost of alumina production, putting pressure on ore prices. Northern domestic bauxite prices were the first to drop back slightly.

As of today, the self-pick-up transaction price (excluding VAT) for bauxite with an Al/Si ratio of 5.0 and 60 per cent alumina content at crushing plants was approximately RMB 640-670 per tonne in Shanxi, RMB 570-610 per tonne in Henan, RMB 510-550 per tonne in Guizhou (Al/Si ratio 5.5, 58 per cent alumina content), and RMB 320-335 per tonne in Guangxi (Al/Si ratio 6.0, 53 per cent alumina content).

According to data from January 31, the weekly port arrivals of bauxite at domestic ports totalled 4.14 million tonnes, an increase of 200,000 tonnes from the previous week. Weekly port departures of bauxite from Guinea's main ports totalled 2.97 million tonnes, a decrease of 160,000 tonnes from the previous week. Weekly port departures of bauxite from Australia's main ports totalled 730,000 tonnes, an increase of 280,000 tonnes, with the impact of the rainy season in Australia becoming increasingly evident.

In terms of prices, alumina prices dropped significantly, and alumina refineries were relatively cautious in purchasing bauxite. High-priced bauxite transactions from earlier periods are unlikely to reappear in the short term, and imported ore prices dropped back slightly.

Spot alumina prices dropped significantly, putting pressure on bauxite prices. Imported bauxite prices pulled back slightly, while northern domestic ore prices dropped back slightly. In the short term, spot alumina prices are likely to maintain a downward trend. Current northern alumina prices have already approached the theoretical marginal cost of alumina production. If the downward trend continues, northern regions are expected to be the first to experience alumina capacity losses. Bauxite prices remain under pressure, but no significant surplus has been observed in the bauxite spot market. Sentiment to stand firm on quotes among holders still exists, and further developments require close attention.

Source: SMM