After a flat run in January and February, struggling to stay afloat in the face of slow demand, spot alumina prices in China have dropped today across all markets. SMM expected alumina prices to rally ahead of the Chinese New Year holiday in mid-February before downward pressure returns. However, alumina prices remained flat and dropped after the holidays. Today’s average spot alumina price stands at RMB 2819 per tonne, down from last closed RMB 2841 per tonne. Spot alumina prices have continued falling after touching the highest in November beginning. The price trend in last three months can be seen in the following graph:
The average price of Chinese domestic alumina in four major regions stood at RMB 2,805 per tonne. Chalco Alumina and imported alumina prices remain unchanged today. Since there have been no downstream demand and inventory is climbing, aluminium producers are not much enthusiastic in stocking alumina. The drop in alumina price was also led by a slump in aluminium ingot price and sellers’ willingness to shell out stock at a lower price. Sellers were drawing good profits because of lower prices of bauxite and caustic soda. Most of the alumina plants, which were partially affected by natural gas supply disruption are now back in action and the supply is increasing keeping the prices low.
In another update from SMM, China's social aluminium inventory hits 2.07 million tonnes on Monday February 26, up from 1.96 million tonnes recorded on Thursday February 22. The current inventory status in the major Chinese cities is as follows:
With the new aluminium capacities coming online if only the aluminium stocks start moving out, there is a possibility of alumina prices moving up in the short and medium term.
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