China’s alumina exports in March to slump further to 100,000-150,000 tonnes given shipment disruption for fresh COVID wave

China’s alumina imports were 212,900 tonnes and 201,100 tonnes in January and February 2022, reflecting a downfall of 16.58 per cent and 5.57 per cent month-on-month. On a year-on-year calculation, the country’s aluminium imports in January stood down by 35.67 per cent, while imports in February decreased by 28.18 per cent. Net imports in those two months were 208,700 tonnes and 197,300 tonnes, respectively. Exports in the said months were 4,200 tonnes and 3,800 tonnes.

The import window was open for most of the time from January 4 to January 17, and the inflow of imported alumina was within a reasonable range. It is to be noted here that Indonesia emerged as the top supplier in February, far exceeding the imports from Australia. Nanshan’s alumina refinery in Indonesia started exporting to a larger trader in China, which boosted the overall imports from Indonesia.

Since February 18, the alumina import window has been closed, while the export window opened with the current price difference between China and overseas expanding to around RMB 1,500 per tonne. As of March 24, the average price of SMM domestic alumina weighted index was RMB 2,970 per tonne, and the average price of SMM alumina FOB Western Australia was US$535 per tonne, equivalent to RMB 4,467 per tonne.

Overseas price is likely to grow further keeping the export window open as the risk of production cuts still exists. At present, Rusal’s Nikolaev alumina refinery in Ukraine, with 1.77 million tonnes of capacity, has been shut down. But to ensure the stable operation of highly profitable aluminium smelters, Rusal may import alumina from neighbouring countries amid the escalation of sanctions. China, being the major alumina producer, is likely to make up for the alumina supply gap of Rusal and even overseas.

China’s alumina imports in March are likely to fall as alumina under long-term orders will only be allowed into the country. The import volume may fall to 50,000 to 10,000 tonnes in March 2022. For exports, 100,000 to 150,000 tonnes of alumina is estimated to be available in March, given disrupted shipments in some areas due to the fresh wave of pandemic.