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Alumina prices fall back after summer highs
Edited by : AL CIRCLE
2 min read
Alumina prices dropped back to what sources said was a more representative level on Friday September 6, following a summer of higher prices supported by decent interest for the sporadic deals on offer over the past weeks.
Metal Bulletin’s fob Australia alumina index fell to $312.88 per tonne from $320.16 previously, reflecting price levels in the Pacific region.
Price levels in the Atlantic market were $10 per tonne below those in the Pacific, and offers in the Atlantic region were reported at $302, sources said.
“Alumina prices of $312 per tonne are now representative of the Pacific market,” a producer said.
Prices traded at $318-320 per tonne throughout August as each cargo offered found good interest among buyers, allowing sellers to add a few dollars to their price.
But as larger aluminium companies start to re-enter the market they have been able to force lower prices that are more commensurate with the current London Metal Exchange aluminium prices.
“I thought prices should have been around $310-313 for the last few weeks, with LME aluminium prices at about $1,800 [per tonne],” a trader said.
Demand in western markets for spot deals is not strong, as most aluminium producers purchase alumina on long-term supply contracts to as to ensure regular tonnages. For this reason, increasing supply often has a sharp effect on prices because spot demand is consistently low.
“We need long-term commitments, so our spot demand is always very low,” an aluminium producer said. “Even if 20 cargoes were available in the Atlantic there wouldn’t be much activity.”
Alumina prices will not likely rise to any great degree as long as LME aluminium prices stay near current levels.
Three-month aluminium prices on the LME fell back below $1,800 per tonne on September 4, after trading above 1,900 per tonne in mid August.
But aluminium prices could rise next year if the cuts in aluminium capacity made by Rusal and others are reciprocated elsewhere.
“There are quite a few cuts coming in the aluminium market,” the producer said. “It should lead to a tighter market, and higher prices.”
Metal Bulletin’s fob Australia alumina index fell to $312.88 per tonne from $320.16 previously, reflecting price levels in the Pacific region.
Price levels in the Atlantic market were $10 per tonne below those in the Pacific, and offers in the Atlantic region were reported at $302, sources said.
“Alumina prices of $312 per tonne are now representative of the Pacific market,” a producer said.
Prices traded at $318-320 per tonne throughout August as each cargo offered found good interest among buyers, allowing sellers to add a few dollars to their price.
But as larger aluminium companies start to re-enter the market they have been able to force lower prices that are more commensurate with the current London Metal Exchange aluminium prices.
“I thought prices should have been around $310-313 for the last few weeks, with LME aluminium prices at about $1,800 [per tonne],” a trader said.
Demand in western markets for spot deals is not strong, as most aluminium producers purchase alumina on long-term supply contracts to as to ensure regular tonnages. For this reason, increasing supply often has a sharp effect on prices because spot demand is consistently low.
“We need long-term commitments, so our spot demand is always very low,” an aluminium producer said. “Even if 20 cargoes were available in the Atlantic there wouldn’t be much activity.”
Alumina prices will not likely rise to any great degree as long as LME aluminium prices stay near current levels.
Three-month aluminium prices on the LME fell back below $1,800 per tonne on September 4, after trading above 1,900 per tonne in mid August.
But aluminium prices could rise next year if the cuts in aluminium capacity made by Rusal and others are reciprocated elsewhere.
“There are quite a few cuts coming in the aluminium market,” the producer said. “It should lead to a tighter market, and higher prices.”
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