Weekly operating rate of alumina decreased again, but supply remained loose; Increase in bauxite suppressed price movement space

Futures market: In the night session, the most-traded alumina 2505 contract opened at RMB 3,035 per tonne, with a high of RMB 3,037 per tonne, a low of RMB 2,992 per tonne, and closed at RMB 2,997 per tonne, down RMB 38 per tonne, a decrease of 1.25 per cent, with an open interest of 205,000 lots.

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Ore side: As of March 28, the SMM imported bauxite index stood at USD 93.1 per tonne, down USD 0.06 per tonne from the previous trading day, mainly due to the decline in caustic soda prices in Shandong. The SMM Guinea bauxite CIF average price was USD 91 per tonne, flat from the previous trading day. The SMM Australia low-temperature bauxite CIF average price was USD 87 per tonne, flat from the previous trading day. The SMM Australia high-temperature bauxite CIF average price was USD 81 per tonne, flat from the previous trading day.

Industry news:

1. On March 28, the Ministry of Industry and Information Technology and nine other departments issued the "Implementation Plan for High-Quality Development of the Aluminum Industry (2025-2027)". The plan mentioned accelerating the increase in domestic bauxite resource reserves and production. It promotes a new round of strategic actions for mineral exploration breakthroughs, adding a batch of exploitable bauxite resources, and encourages technological breakthroughs in the development and utilisation of low-grade and high-sulphur bauxite. The plan also mentioned the need to cautiously construct alumina projects. New or expanded alumina projects must meet the advanced mandatory energy consumption limit standards and environmental performance level A. No new or expanded alumina production lines using diaspore as raw material will be built. In principle, new or expanded alumina projects (including those producing aluminium hydroxide from bauxite) must have bauxite production rights matching the capacity and a certain comprehensive utilisation capacity of red mud.
2. According to SMM data, in March 2025, the total bauxite raw material inventory of domestic alumina refineries was basically flat, up 0.1 per cent MoM, but down 0.5 per cent YoY. As of March 28, SMM statistics showed that the total bauxite inventory at nine ports was 16.06 million tonnes, with port bauxite inventory increasing by 1.5 million tonnes from the end of last month, mainly due to increased imported bauxite supply.
3. Monthly alumina production dynamics: According to SMM data, in March 2025 (31 days), China's metallurgical-grade alumina production increased by 8.86 per cent MoM and 11.32 per cent YoY. By the end of March, China's metallurgical-grade alumina existing capacity was around 105.02 million tonnes, with actual operating capacity down 1.68 per cent M-o-M, and the operating rate at 84.64 per cent.
4. According to SMM, the mainstream alumina refineries in Guangxi Province lowered their caustic soda procurement prices by RMB 700 per tonne (converted to 100 per cent concentration) in April compared to March, with the delivery-to-factory price of 50 per cent ion-exchange membrane liquid caustic soda at around RMB 3,600 per tonne (converted to 100 per cent concentration), with slight differences in some regions due to varying transportation distances.

Basis daily report: According to SMM data, on March 28, the SMM alumina index was at a premium of RMB 75 per tonne against the most-traded contract's latest transaction price at 11:30.

Warrant daily report: On March 28, the total registered alumina warrants increased by 15,626 tonnes from the previous trading day to 298,500 tonnes. The total registered alumina warrants in Shandong remained flat at 4,513 tonnes from the previous trading day. The total registered alumina warrants in Henan remained flat at 25,800 tonnes from the previous trading day. The total registered alumina warrants in Guangxi remained flat at 49,800 tonnes from the previous trading day. The total registered alumina warrants in Gansu remained flat at 22,500 tonnes from the previous trading day. The total registered alumina warrants in Xinjiang increased by 15,626 tonnes from the previous trading day to 195,800 tonnes.

Overseas market: As of March 28, 2025, the FOB alumina price in Western Australia was USD 377 per tonne, with an ocean freight rate of USD 21.40 per tonne, and the USD/CNY exchange rate selling price was around 7.28. This price translates to a selling price of around RMB 3,358 per tonne at domestic mainstream ports, which is RMB 247 per tonne higher than domestic alumina prices, keeping the alumina import window closed.

Based on the latest FOB transaction price of USD 368 per tonne in Eastern Australia, the estimated selling price at domestic mainstream ports is around RMB 3,300 per tonne, less than RMB 200 per tonne higher than the SMM alumina price index. If overseas alumina prices further decrease and the rate of decrease exceeds that of domestic prices, the alumina import window may gradually open. On the export side, based on the latest spot transaction prices of alumina in Shandong, the domestic alumina export cost is around USD 450 per tonne, higher than overseas spot alumina prices, keeping the export window closed.

Summary: Last week, the weekly operating rate of alumina was lowered again, with the national total operating capacity of metallurgical alumina decreasing to 87.3 million tonnes per year, down 700,000 tonnes per year W-o-W, but the overall supply surplus in the alumina market has not yet reversed. According to SMM data, as of last Thursday, the total operating capacity of domestic aluminium was 43.88 million tonnes per year, translating to an alumina demand operating capacity of around 84.47 million tonnes per year, with theoretical demand increasing slightly but still below actual operating levels.

On the supply side, domestic bauxite supply remains low, with limited increments; increased imported bauxite supply has driven the total domestic bauxite supply, potentially making the bauxite supply and demand fundamentals more relaxed than before, with bauxite prices likely to remain under pressure in the short term.

Meanwhile, downstream aluminium plants reported that alumina procurement is mainly based on long-term contracts, and some plants that have stockpiled for winter are planning to actively reduce inventory. Last week, according to SMM statistics, alumina raw material inventory at aluminium plants decreased by 44,000 tonnes W-o-W. In the short term, alumina circulating supply is expected to remain relatively loose, and alumina prices may continue to operate under pressure. Subsequent attention should be paid to changes in alumina operating capacity.

Note: This article has been issued by SMM and has been published by AL Circle with its original information without any modifications or edits to the core subject/data.