This week's spot alumina transaction prices continued to decline, while the domestic alumina export window may gradually open

As on February 13, the SMM regional weighted index was RMB 3,391 per tonne, down RMB 411 per tonne W-o-W. Among them, Shan Dong reported RMB 3,250-3,350 per tonne, down RMB 425 per tonne W-o-W; Henan reported RMB 3,350-3,450 per tonne, down RMB 375 per tonne W-o-W; Shanxi reported RMB 3,250-3,450 per tonne, down RMB 350 per tonne W-o-W; Guangxi reported RMB 3,400-3,500 per tonne, down RMB 550 per tonne W-o-W; Guizhou reported RMB 3,450-3,600 per tonne, down RMB 515 per tonne W-o-W; Bayuquan reported RMB 4,610-4,690 per tonne.

Overseas market

As of February 13, 2025, FOB Western Australia alumina prices were USD 538 per tonne, ocean freight rate was USD 19.70 per tonne, and the US dollar/RMB exchange rate selling price was around 7.31. This price translates to an ex-factory selling price of approximately RMB 4,688 per tonne at major domestic ports, RMB 1,247 per tonne higher than domestic alumina prices, keeping the alumina import window closed. This week, one new overseas alumina spot transaction was recorded: on February 11, 30,000 tonnes of alumina was transacted at USD 538 per tonne FOB Western Australia or USD 534 per tonne FOB Eastern Australia, with shipment scheduled for late March.

Domestic spot alumina prices continued to plummet, with the lowest spot transaction prices in northern China this week reaching around RMB 3,200-3,300 per tonne. Considering freight and port miscellaneous fees, this translates to an FOB price of approximately USD 460-490 per tonne, lower than Australian alumina FOB prices, potentially gradually opening the export window.

Domestic market

According to SMM data, as of this Thursday, the national weekly operating rate of alumina decreased by 0.36 percentage points W-o-W to 86.94 per cent. Among them, the weekly operating rate of alumina in Shandong remained flat WoW at 92.66 per cent; in Shanxi, it decreased by 1.03 percentage points W-o-W to 79.57 per cent; in Henan, it decreased by 0.71 percentage points W-o-W to 68.45 per cent; and in Guangxi, it remained flat at 93.94 per cent. During the period, aluminium smelters were relatively active in tendering and purchasing alumina, and spot transaction prices continued to decline. This week, spot transaction ex-factory prices for alumina in Henan were RMB 3,320-3,550 per tonne; in Guizhou, RMB 3,420-3,700 per tonne; in Guangxi, delivery-to-factory prices in Yunnan were RMB 3,460 per tonne. Additionally, aluminium smelters in Xinjiang tendered for some spot alumina, with delivery-to-factory prices around RMB 3,600-3,800 per tonne, while aluminum smelters in north-west China tendered for some spot alumina, with delivery-to-factory prices at 3,425-3,525 yuan/mt.

Overall

Supply side, some alumina refineries in northern China reported maintenance this week, which may slightly impact alumina supply in the short term, with the weekly operating rate of alumina slightly decreasing by 0.33 percentage points. Demand side, some aluminium production capacity in Sichuan and other regions undergoing technological transformation or production cuts may gradually resume production, increasing demand for alumina. Cost side, due to the sharp decline in spot alumina prices, alumina refineries have significantly reduced their acceptance of high-priced bauxite, leading to a decline in bauxite quotations from holders and a drop in imported bauxite prices. Alumina production costs may decrease accordingly, but current spot alumina transaction prices in northern China are below the theoretical marginal cost of production. Overall, large-scale alumina production cuts have not yet occurred, and the spot alumina market remains relatively ample in supply. Spot transaction prices continue to decline and may maintain a downward trend in the short term.

Source: SMM