SHANGHAI, Sep 19 (SMM) - Price review: The SMM weighted alumina index stood at 2,927 yuan/mt as of last Friday, down 14 yuan/mt from a week ago. The prices stood between 2,850-2,960 yuan/mt in Shandong (down 10 yuan/mt), 2,960-3,040 yuan/mt in Henan (down 25 yuan/mt), 2,840-2,910 yuan/mt in Shanxi (down 5 yuan/mt), 2,890-2,950 yuan/mt in Guangxi (down 20 yuan/mt), 2,850-2,930 yuan/mt in Guizhou, and 3,000-3,050 yuan/mt in Bayuquan.
Overseas market: Trading activities in the overseas market picked up. Two deals were done at $348/mt FOB Western Australia on September 12, each with a volume of 30,000 mt, for shipment in late October and early November respectively, and the destination was unknown. Another deal for 30,000 mt of alumina was done at $352/mt FOB Western Australia on September 13, for shipment in late October, and the destination was unknown. One transaction for 60,000 mt of alumina was done at $358/mt FOB Western Australia on September 14, for shipment in late October, and the destination was unknown. Overseas alumina prices have sustained its rally for two weeks. The widening price difference between domestic and overseas markets will boost alumina exports.
Domestic market: Prices fell across all the mainstream alumina producing provinces, except for Guizhou. The overall trades were thin. One deal for 5,000 mt of alumina was done at 2,845 yuan/mt (in cash, ex-factory) in Shanxi. In Guangxi, one transaction for 5,000 mt of alumina was done at 2,890 yuan/mt (in cash, ex-factory). The pandemic in Guizhou has not been significantly alleviated, and the production of local alumina refineries was still restricted, leaving the local prices immune to decline.
Price evolution: With the gradual implementation of power rationing policy in Yunnan, the market is now more concerned about how much aluminium output will be lost in the province. According to the latest SMM survey, some local aluminium smelters expect the output reduction to expand to 20-30%. This will put alumina demand at risk of falling. Moreover, with the continuous release of new alumina production capacity in south-west China, local alumina prices may be susceptible to further drop.
