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15 NOVEMBER 2017 AL CIRCLE

Winter capacity cut starts in China today; alumina prices register a slight drop

EDITED BY : BEETHIKA BISWAS 2MINS READ

The implantation date for actual winter capacity cut starts today. With the arrival of production limit date, alumina plants from different Chinese provinces have been implementing their reduction plan.

As updated by Shanghai Metals Market, average spot alumina price in China stands at RMB 3701/t today on November 15. SMM expects the spot prices to stay within RMB 3701 per tonne today. Domestic spot alumina prices have dropped further to RMB 3655/t after hovering at RMB 3685/t since October 24.  Domestic prices are expected to range within RMB 3550 – 3760 per tonne today. The drop in domestic alumina prices can be seen in the graph below:

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According to Shanghai Metals Market report, China Aluminum Shandong Branch is going to reduce three production lines with 35,000 monthly alumina output in reduction procedure. The plant is prepared for operation process and is currently planning reduction in the rest of the production lines.   

Henan Eastern Hope (Sanmenxia) Aluminium Co., Ltd. has suspended 30% of production output. Henan Sanmenxia Yixiang Aluminium Co., Ltd. is stopping production at one production line of 130,000 tonnes annual capacity from Nov.15th.

Imported alumina prices and Chalco alumina prices remain unchanged today. We need to wait till the implementation of winter capacity cut to see further effect on alumina prices.

SMM also learnt that because of dropping prices of primary aluminium, aluminium consumption has increased dramatically in the last month.  This has caused a temporary drop in supply. The prices did not drop as dramatically as the A00 Aluminium. It is estimated that supply tightness will last till the Spring Festival after the winter capacity cut and become a norm. The price will continue rising in the mid-term and not expected to drop.


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EDITED BY : BEETHIKA BISWAS 2MINS READ

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