China alumina prices to face downward pressure due to surplus market; smelters remain profitable

<p>Due to huge aluminium capacity cuts by Weiqiao and Xinfa Group, alumina market in China is in surplus.&nbsp; SMM expects that due to inflows of surplus alumina from Weiqiao group, alumina prices will face continuous downward pressure.</p> <p style="text-align: center;"><img style="vertical-align: middle;" src="http://www.alcircle.com/uploads/images/alumina.jpg" alt="News" width="329" height="200" /></p> <p>Weiqiao Group has announced that it will release alumina into the open market for sale. Moreover, Xinfa Group is already selling in the market and this might worsen the situation in the market.</p> <p>The weighted average alumina price in the four major domestic major markets remained unchanged week-on-week at 2,521 RMB/tonne on August 11.</p> <p>As updated by SMM, the major alumina and aluminium producers in China had two meetings last week to discuss future price trends of the materials. &nbsp;As seen by SMM, due to the uncertainty in the market, both the sellers and buyers avoided taking any risk and took a wait-and-see stance, which kept alumina prices flat week-on-week.</p> <p>SMM statistics showed that due to rising aluminium prices, aluminium billet stocks in Guangdong, China&rsquo;s most active aluminium billet consumption hub, rose as much as 61.3% month-on-month as on August 10. Total stocks in the region stood at 115,200 tonnes as on August 10.</p> <p>{googleAdsense}</p> <p>On another update, China Aluminum International Trading Co. (Chalco Trading) cut aluminium prices it offered across major markets for three consecutive days to encourage buyers.&nbsp; Today&rsquo;s price cuts are given in the following chart:</p> <p style="text-align: center;"><img style="vertical-align: middle;" src="http://www.alcircle.com/uploads/images/chalco%20price14.png" alt="News" width="437" height="205" /></p> <p>Aluminium smelters in China are doing profitable business due to rising aluminium prices. The SMM average spot aluminium price edged further up by 1,160 RMB/tonne on a weekly basis to 15,462 RMB/tonne in the week ending August 11. This increased profit further beyond 2,500 RMB/tonne at domestic aluminium smelters.</p>