SMM

[SMM Morning Comment on Alumina: Reports of Production Cuts at Some Northern Refineries Have Minimal Impact on Supply for Now] Supply side, some alumina refineries in northern regions reported maintenance this week, which may slightly affect alumina supply in the short term. Weekly operating rates of alumina refineries dropped slightly by 0.33 percentage points this week. Demand side, some aluminum production capacity in Sichuan and other regions, which had been cut for technological transformation, may gradually resume production, leading to an increase in alumina demand. Cost side, due to the sharp decline in spot alumina prices, alumina refineries have significantly reduced their acceptance of high-priced bauxite. As a result, bauxite holders have lowered their offers, and imported bauxite prices have also fallen. Alumina production costs may decrease accordingly. However, the current spot transaction prices of alumina in northern regions are below the theoretical marginal production cost. Overall, large-scale alumina production cuts have not yet occurred. The spot alumina market remains relatively well-supplied, and the downward trend in spot transaction prices persists, likely continuing to decline in the short term.