China alumina prices drop sporadically as spot market braces for added supply

China alumina spot market is bracing for an increased supply as illegal aluminium capacity closure is expected to add nearly 170,000 tonnes of alumina to it, reported Shanghai Metals Market.  Driven by the speculation, alumina prices in some of China’s major markets dropped significantly on Tuesday, July 25.

The average alumina price in Central China market dived by 0.59 per cent from its earlier RMB 2,550 per tonne on July 24, to RMB 2,535 per tonne on July 25. The commodity has been static at RMB 2,550 per tonne level since its last drop on July 18.

The drop has been steeper for alumina prices in the North China market. The commodity fell by 0.98 per cent to stand at RMB 2,525 per tonne on July 25, as compared to its last stand at RMB 2,550 per tonne on July 24. North China alumina had last witnessed an RMB 10 per tonne drop on July 18. Before that the key aluminium raw material traded at RMB 2,560 per tonne.

It is clear from the recent SMM updates that China aluminium market is slowly moving toward a glut. Xinfa Group said that they may ship excess alumina to its aluminium plant in Xinjiang after cutting 530,000 tonnes of aluminium capacity last week. Weiqiao Group may also reduce its alumina imports from Indonesia so as to optimise its alumina capacity back home.

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The weighted average alumina price in China’s four major markets was RMB 2,528.75 per tonne on July 24, down RMB 10 per tonne on a weekly basis.

The current average imported price of alumina in China stands at RMB 2,800 per tonne while Chalco keeps its price for the commodity unchanged at RMB 2,650 per tonne.