Chinese domestic alumina prices nudges higher, with the north index up 0.6%

<p>CBIX eased US$0.4/dmt to US$50.3/dmt for the week on the back of lower Value in Use (ViU) priced Solomon Islands material countering higher priced imports from Brazil and Australia. News from Malaysia reports exports from Kuantan now moving to help clear stocks, but sentiment on ground suggests the mining ban will continue until at least the March 2017 election. Malaysian prices edged higher, with unwashed ore selling for US$27.5/dmt FOB and washed also higher at US$40-41/dmt FOB.<br /><br />Chinese domestic alumina prices nudged slightly higher, with the north index up 0.6% (RMB18/t or US$2.6/t) to RMB2,994/t and the south up 0.2% (RMB5/t or US$0.7/t) to RMB2,980/t (US$431/t). Alumina market tightness persists, driven by new smelter start-ups and ramp-ups of idled capacity, stocking prior to the Spring Festival, transportation bottlenecks and environmental inspections. A further factor likely to influence alumina prices in the short-term are negotiations for annual contracts, which typically take place in China during December and January, incentivising refiners to lock in current prices.<br /><br /><img style="vertical-align: middle; display: block; margin-left: auto; margin-right: auto;" src="http://www.alcircle.com/uploads/images/CBIX-alumina.png" alt="News" width="517" height="226" /><br />Furthermore, a series of meetings held last week in Beijing and Shandong (arranged by leading industry participants) discussed the current state of the market, especially the falling primary Al price, which has shed over RMB2,000/t since late November (Changjiang 23rd Nov = RMB14,990/t, 16th Dec = RMB12,970/t). Concern is growing that some new primary and alumina capacity startups (and planned restarts) could well be uneconomic if the primary Al price continues its downward trend.<br /><br />{googleAdsense}<br /><br />Freight rates fell, on the back of lower timecharter rates. This was despite higher bunker (fuel) prices. Capesize rates on the Guinea-Shandong route fell 11.7% (US$1.59/wmt) to US$12.03/wmt and panamax rates on the North Australia to Shandong route fell 3.4% (US$0.21/wmt) to US$6.14/wmt.</p>