Spot alumina transaction prices in northern regions continue to narrow decline; spread between futures and spot prices continues to narrow

During the night session, the most-traded alumina 2502 futures contract opened at RMB 3,800 per tonne, with a high of RMB 3,806 per tonne and a low of RMB 3,772 per tonne, closing at RMB 3,784 per tonne, down RMB 17 per tonne or 0.43 per cent. Open interest stood at 48,700 lots.

As for spot alumina transactions, in Henan, 7,000 tonnes of spot alumina were transacted at a price range of RMB 3,880-3,900 per tonne.

The spot-futures price spread daily report suggests that, according to SMM data, as of 11:30 on January 22, the SMM alumina index showed a premium of RMB 392 per tonne against the latest transaction price of the most-traded contract.

Warehouse warrant daily report

On January 22, the total registered warehouse warrants for alumina decreased by 902 tonnes from the previous trading day to 37,900 tonnes. In Shandong, the total registered warehouse warrants remained unchanged at 901 tonnes; in Henan, unchanged at 12,000 tonnes; in Guangxi, unchanged at 0; in Gansu, unchanged at 0 tonne; and in Xinjiang, decreased by 902 tonnes to 25,000 tonnes.

Overseas Market

As of January 22, the FOB Western Australia alumina price was $573 per tonne, with an ocean freight rate of $20.9 per tonne. The USD/CNY exchange rate selling price was around 7.29. This price translates to an approximate selling price of RMB 4,973 per tonne at major domestic ports, which is RMB 778 per tonne higher than domestic alumina prices. The alumina import window remains closed.

Recently, the weekly operating rate of alumina has continued to increase slightly, while there has been no significant change on the demand side. The price centre of recent spot alumina transactions continues to decline, but the rate of decline has narrowed compared to earlier periods. As of now, alumina capacity has not entered a large-scale loss-making state. In the short term, alumina operating rates are expected to remain high, with the supply and demand fundamentals maintaining a slight surplus. Overall, spot alumina prices are expected to continue their downward trend in the short term. Close attention should be paid to bauxite transaction prices, alumina costs, and overseas spot alumina prices.

Source: SMM