Alumina prices surge further: Expected to support aluminium prices – SMM learned

Shanghai Metal Market (SMM) believes that the aluminium prices, which fell drastically on London Metal Exchange (LME) on Tuesday, April 24, 2018 following the US eased sanctions on Russia, are going to gain some support from the higher alumina prices.

Last week, alumina was traded at US$800 per tonne in Brazil, while in Australia the prices were hovering at US$710 per tonne on Thursday, April 19, 2018, up US$225 per tonne from April 13.

50 per cent production cut at Norsk Hydro’s Alunorte in Brazil since late February and poor supply of Russian alumina due to US sanctions on Rusal and other major producers were the prime reasons for the pick and is estimated to affect around 319,000 tonnes of alumina output each month, according to SMM.

The turning point for alumina production is, however, expected to arrive in next three months once Alunorte resumes full production. The growth in prices may also taper off when China’s alumina exports will become sufficient to meet overseas demand. The volume of China’s alumina exports, currently standing at 30,000 tonnes each month, is likely to grow 100,000 tonnes, SMM found in a survey. Average prices of alumina in China's four major markets also soared to stand at RMB 3,135 per tonne on Tuesday, April 24, RMB 219 per tonne higher from last Friday.

The above graph indicates the alumina price surge on April 25, 2018.

On April 25, 2018, the average price has surged even further to RMB 3135 per tonne from RMB 3118 per tonne on April 24, with no price fluctuations across the major Chinese cities. 

As far the average A00 aluminium ingot price is concerned in China, SMM learned that it plunged marginally on April 25, 2018 to close at RMB 14430 per tonne. The prices are expected to range between RMB 14410 per tonne and RMB 14450 per tonne, with spot discounts remaining same to settle at RMB 50 to RMB 90 per tonne like yesterday.