SMM Morning Comment on Alumina 3.3
Futures market: On Friday night session, the most-traded alumina 2505 contract opened at 3,350 yuan/mt, reached a high of 3,376 yuan/mt and a low of 3,350 yuan/mt, and finally closed at 3,363 yuan/mt, up 0.39%. Open interest stood at 169,000 lots, an increase of 850 lots. Spot alumina prices: On February 20, SMM alumina was quoted at 3,381 yuan/mt, flat compared to the previous trading day.
Ore: As of February 19, the SMM imported bauxite index was reported at $96.26/mt, flat compared to the previous trading day. The CIF average price of Guinean bauxite was $95/mt, flat compared to the previous trading day, while the CIF average price of Australian bauxite was also $95/mt, flat compared to the previous trading day.
Industry Dynamics:
1. According to SMM calculations, China's bauxite production in February 2025 (28 days) decreased by 10.9% MoM but increased by 11.8% YoY, mainly due to low production levels in Shanxi and Henan in February 2024. Currently, domestic bauxite production remains low, but the significant increase in imported bauxite supply has improved the supply-demand fundamentals.
2. In February 2025, the average tax-inclusive full cost of China's aluminum industry was 16,909 yuan/mt, down 15.4% MoM but up 2.5% YoY, mainly due to the sharp pullback in spot alumina prices during the period.
3. Overseas alumina transactions: On February 28, 30,000 mt of alumina was transacted at $468/mt FOB Gladstone, Australia, with shipment scheduled for late April.
4. According to SMM, mainstream alumina refineries in Guangxi Province reduced their caustic soda procurement prices by 100 yuan/mt (converted to 100% concentration) in March compared to February. The delivery-to-factory price for 50% ion membrane liquid caustic soda was approximately 4,300 yuan/mt (converted to 100% concentration), with slight regional price differences due to varying transportation distances. Starting February 26, a major alumina refinery in Shandong adjusted the purchase price of 32% ion membrane liquid caustic soda, reducing it by 30 yuan/mt from 890 yuan/mt to 860 yuan/mt under the two-invoice system (converted to 100% concentration price of approximately 2,688 yuan/mt).
5. According to SMM data, China's metallurgical-grade alumina production in February 2025 (28 days) decreased by 8.5% MoM but increased by 10.4% YoY. As of February 28, the existing capacity of China's metallurgical-grade alumina was approximately 105.02 million mt, with operating capacity up 0.3% MoM and an operating rate of 86.1%.
6. According to SMM statistics on February 27, domestic port alumina inventory totaled 28,000 mt, up 13,000 mt from the previous week. The SMM alumina index on February 28 showed a premium of 26 yuan/mt against the most-traded contract's latest transaction price at 11:30.
Warehouse Warrant Daily Report: On February 28, the total registered warehouse warrants for alumina increased by 33,685 mt from the previous trading day to 142,900 mt. In Shandong, the total registered warehouse warrants remained flat at 4,513 mt. In Henan, the total registered warehouse warrants decreased by 599 mt to 18,900 mt. In Guangxi, the total registered warehouse warrants remained flat at 20,147 mt. In Gansu, the total registered warehouse warrants increased by 3,608 mt to 6,616 mt. In Xinjiang, the total registered warehouse warrants increased by 10,529 mt to 9,280 mt. Overseas Market: As of February 28, the FOB Western Australia alumina price was $485/mt, with ocean freight at $19.75/mt. The USD/CNY exchange rate selling price was around 7.30, translating to a domestic mainstream port external selling price of approximately 4,247 yuan/mt, 865 yuan/mt higher than domestic alumina prices. The alumina import window remains closed.
Summary: Recently, domestic spot alumina prices have stabilized, mainly due to increased demand for alumina exports and delivery to warehouses, which has supported prices. In the short term, spot alumina prices in some regions have rebounded slightly. However, overseas alumina prices have declined, and the export window remains largely closed. Delivery to warehouses cannot provide sustained demand, and the market expects some new alumina capacity to gradually come online. In the medium and long term, spot alumina prices are still under pressure. In the short term, spot alumina prices may enter a phase of fluctuation and adjustment. Continuous attention should be paid to alumina export profitability and changes in bauxite prices.
[The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make prudent decisions and not substitute this for independent judgment. Any decisions made by clients are unrelated to SMM.]
