03 JUNE 2016Platts
Australian alumina priced out of China by weak yuan, Chinese supply
Edited by : AL CIRCLE
2 min read
A well-supplied Chinese domestic alumina market and the depreciating yuan have made Australian alumina increasingly unaffordable for Chinese aluminum smelters, market sources have said in recent weeks.
The yuan is at a five-year low, closing Wednesday at Yuan 6.5889 against the dollar.
The Chinese currency has lost 2% of its value in the last month and alumina market participants have said they are anticipating further downside for the yuan.
Although the price of Australian alumina has dropped $0.50/mt in the last week to $252.50/mt FOB on Wednesday, according to S&P Global Platts assessment, the premium for Australian alumina over material from China's Shanxi province has swelled disproportionately to $16/mt and Yuan 104/mt, compared with $11/mt and Yuan 70/mt a week ago, in import parity terms.
Weaker Chinese domestic alumina prices also contributed to the wider Australian premium.
In Shanxi province, domestic prices have come off Yuan 30/mt ($4.55/mt) in the last week to Yuan 1,980/mt ex-works, pressured by stockbuild among refiners.
On Thursday, a trader reported the sale of a 30,000 mt alumina parcel at $252.50/mt FOB Western Australia LC at sight, for shipment in mid-July.
In the last couple of days, a number of consumer and trader sources have said that the buyers' ceiling in China was generally around $250/mt FOB Australia.
The yuan is at a five-year low, closing Wednesday at Yuan 6.5889 against the dollar.
The Chinese currency has lost 2% of its value in the last month and alumina market participants have said they are anticipating further downside for the yuan.
Although the price of Australian alumina has dropped $0.50/mt in the last week to $252.50/mt FOB on Wednesday, according to S&P Global Platts assessment, the premium for Australian alumina over material from China's Shanxi province has swelled disproportionately to $16/mt and Yuan 104/mt, compared with $11/mt and Yuan 70/mt a week ago, in import parity terms.
Weaker Chinese domestic alumina prices also contributed to the wider Australian premium.
In Shanxi province, domestic prices have come off Yuan 30/mt ($4.55/mt) in the last week to Yuan 1,980/mt ex-works, pressured by stockbuild among refiners.
On Thursday, a trader reported the sale of a 30,000 mt alumina parcel at $252.50/mt FOB Western Australia LC at sight, for shipment in mid-July.
In the last couple of days, a number of consumer and trader sources have said that the buyers' ceiling in China was generally around $250/mt FOB Australia.
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