The average alumina spot price in China shows no signs of easing its upward trajectory shortly amid limited bauxite inflow into the domestic market to feed refineries and heavy demand for alumina for primary aluminium production. As of October 28, China's domestic alumina price has entered yet another week on the Shanghai Metals Market, with an increase of RMB 50 per tonne to an average of RMB 4,900 per tonne for the day.
In this context, the upstream industry closely monitors the situation, anticipating China's domestic alumina price exceeding RMB 5,000 per tonne. If a similar trend continues, the price is likely to touch the level by the end of this week.
Compared to the price a month ago, the domestic alumina price has rallied by 19.75 per cent from RMB 4,092 per tonne. Annually, the price has edged a surge of 62.84 per cent from RMB 3,009 per tonne.
In provinces like Shandong and Shanxi, the alumina price has already surpassed RMB 4,900 per tonne by gaining RMB 50 over the weekend. Meanwhile, the Australian alumina FOB price has remained restrained at US$693 per tonne since October 17.
Among other input costs, imported bauxite price has inched up by US$0.01 per tonne over the week to stand at RMB 81.72 per tonne. Domestic aluminium powder price has increased by RMB 0.1 per kg to clock at RMB 234 per kg, averaging between RMB 23.3 and RMB 23.5 per kg.
Repercussions on aluminium ingot prices
A week with a hike in primary aluminium input costs has not spared the ingot price and escalated it by RMB 120 per tonne over the weekend to RMB 20,940 per tonne. The average prices are hovering around RMB 20,920-20,960 per tonne, with the spot contract to be traded at a premium price of RMB0-40 per tonne.
Week-on-week, the price is up by RMB 150 per tonne from RMB 20,790 per tonne, indicating an improved demand in the downstream sector during the traditional peak season, as also reflected in inventories' destocking speed. Since after the National Day holiday, 46,000 tonnes of aluminium ingot stocks have been destocked, bringing the total inventory to 512,000 tonnes as of October 21. SMM believes that if the domestic aluminium ingot inventory continues to decline till late October, it is expected to return to the lowest point in nearly five years.
The provincial prices have also increased over the weekend, with Tianjin reflecting the highest rise. The price in Tianjin has hiked by RMB 190 per tonne to RMB 20,960 per tonne, followed by an increase of RMB 150 per tonne in Linyi to RMB 20,940 per tonne and RMB 140 per tonne in Foshan to RMB 20,780 per tonne, found the Shanghai Metals Market.
In tandem with the hikes in aluminium ingot prices, aluminium alloy (A356) and aluminium alloy (A360) prices have heightened by RMB 150 per tonne to RMB 21,400 per tonne and RMB 21,550 per tonne, respectively.
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