Q2 2026 sees oversupply weighing on FOB Australia alumina prices

FOB Australia alumina prices are expected to remain under pressure in the second quarter of 2026 due to continued oversupply in the market.

Demand for alumina weakened in late Q1 as smelter operations in the Middle East were disrupted by geopolitical conflict. Production cuts at aluminium smelters reduced alumina consumption, while refinery output remained largely steady. This created excess supply, which moved into the seaborne market.

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According to S&P Global Platts, FOB Australia alumina was assessed at USD 304 per tonne on April 15. The average price for Q1 was USD 306.91 per tonne, down 2.82 per cent from the previous quarter. Prices in China also declined, with CIF China alumina averaging USD 331.36 per tonne and domestic prices falling further.

Brazilian alumina traded at a 10.22 per cent higher premium to Australian material week-over-week, averaging USD 28.50 per tonne in Q1.

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Middle East disruptions added volatility in the global market. Smelters in Qatar and Bahrain reduced operations due to supply issues and attacks on industrial facilities. Emirates Global Aluminium's Al Taweelah complex was damaged, leading to a shutdown that could take up to a year to fully restore. These disruptions reduced regional alumina demand.

At the same time, supply increased. Material that would have gone to affected smelters was redirected to global markets. Outside the region, additional supply pressures emerged after South32 placed its Mozal smelter in Mozambique under care and maintenance, redirecting alumina volumes to external buyers.

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Rising energy and freight costs supported China’s alumina market from early March. Prices strengthened in spot and futures markets on concerns over possible bauxite supply limits from Guinea, though no firm policy changes were confirmed.

Freight from Kamsar to China averaged USD 29.96 per tonne in March, up 22 per cent quarter over quarter. CIF China spot bauxite was assessed at USD 68 per dry tonne on April 9, while FOB Guinea bauxite stood at USD 34 per dry tonne.

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Higher Chinese prices helped absorb surplus supply through imports, easing pressure on FOB Australia alumina. However, this support may weaken as new refining capacity in Guangxi comes online.