Analysts give 2018 outlook for alumina and aluminium at SMM Copper Aluminium Summit

The on-going SMM Copper Aluminium Summit in Shanghai is opening up a number of discussions on the alumina and aluminium sector in China and also throwing light on the possible impacts of the latest tariff on aluminium and steel industry.

According to Guo Qiuying, an aluminium analyst at SDIC Essence Futures, there is limited downward room for alumina prices due to costs of essential raw materials like caustic soda and bauxite. The analyst expects the prices of raw material to rebound in 2018, lifting alumina prices. Environmental concerns will continue to draw attention from the government and supply will remain tight due to restricted capacity.    

Today’s average spot alumina price stands at RMB 2730 per tonne, flat since the last change on March 12. Spot alumina prices have continued falling after touching the highest in 2017 November beginning. The price trend in last one month can be seen in the following graph:

According to Guo, low social inventory of alumina and higher input prices will lift alumina prices and alumina is likely to trade at range of RMB 2,500-3,500 per tonne this year and the average spot alumina price will settle at about RMB 3,150 per tonne. He told delegates at the SMM Copper Aluminium Summit on Friday March 23 that having fewer participants in the alumina industry will provide a stronger position to negotiate prices.  

Senior aluminium analyst at Shanghai Metals Market, Liu Xiaolei said today during the summit that China's aluminium output is likely to grow at a slower pace in 2018 owing to supply-side reforms and restricted production during the heating season.

It is to be noted that China's inventory of refined aluminium, including SHFE warrants, dipped for the first time since February and stood at 2.28 million tonnes as on Thursday March 22. SMM data showed that this is down from 2.29 million tonnes on Monday March 19.