Rebound in alumina prices YTD outpacing aluminium price in China

Strong rise in alumina prices have been supporting China’s domestic aluminium price. According to the latest data, alumina prices increased 18.2 per cent from the start of the year, which greatly outpaced the aluminium price rise and lifted the price ratio between alumina and aluminium from 0.28 in the beginning of this year to 0.32 in March.

Industry analysts note that unlike aluminium, where production cuts ceased in Q1 this year in China, production cuts for alumina continued in the first quarter as a result of scheduled capacity idling from the end of last year when the alumina price plunged due to the aluminium smelters’ production cuts.

The analysts further point out that the time lag in refinery production cuts led to a strong rebound in alumina prices YTD, and they believe the aluminium price also benefited from the alumina price increase, thanks to market perceptions of raw material tightness and cost support.

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