Chalco to increase alumina import only if the prices drop though fear of alumina shortage looms large

Though there is a fear of alumina shortage in China due to environmental checks, Chalco or Aluminum Corp of China Ltd will increase its alumina import alumina only if the international prices are low enough compared to domestic alumina. A company executive from its trading unit said this on Tuesday, May 28. 

Alumina market is under pressure due to environmental checks on refineries in China. A major refinery in Shanxi province was recently given closure notice following spillage of red mud waste, followed by another which is generating supply concerns in the domestic market.

"We still need to look at the price. If the price is suitable we will import," Li Guangfei, deputy general manager of China Aluminum International Trading Co, a Chalco trading arm, said on the sidelines of the Shanghai Derivatives Market Forum.

"At present the import price is not too suitable," he added.

Chalco reported 18.86 million tonnes of annual alumina refining capacity in China in their annual report for the year 2018. The company has plants in Shanxi, one of the major alumina producing regions.  Spot prices for imported alumina in China have risen by 7.9% since May 13 after the news of closure of Shanxi refineries spread in the market.  Imported alumina price stands US$454.61 per tonne today, the highest since December 2018.

SMM reported that according to China customs, China's alumina import doubled in March to 60,000 tonnes. Traders expect alumina imports to rise further in May and June driven by the refinery closure in Shanxi.

Jiang Yan, chairman of the Shanghai Futures Exchange said earlier that the exchange is preparing to launch alumina futures this year considering the growing volatility in alumina prices.

Australian alumina FOB price stands at US$ 377 per tonne and average spot prices of domestic alumina stands at US$ 445.63 per tonne today.