The market has strong expectations for alumina production resumptions, and the first pullback in alumina futures prices may drive spot cargo prices weaker

Futures Market: Overnight, the most-traded alumina 2509 futures contract opened at RMB 2,952 per tonne, with a high of RMB 2,986 per tonne, a low of RMB 2,941 per tonne, and closed at RMB 2,954 per tonne, down RMB 10 per tonne or 0.34 per cent, with an open interest of 353,000 lots.

Ore: As of May 29, the SMM Import Bauxite Index was reported at USD 74.11 per tonne, up USD 0.23 per tonne from the previous trading day. The SMM Guinea Bauxite CIF average price was reported at USD 74 per tonne, unchanged from the previous trading day. The SMM Australia Low-Temperature Bauxite CIF average price was reported at USD 70 per tonne, unchanged from the previous trading day. The SMM Australia High-Temperature Bauxite CIF average price was reported at USD 65 per tonne, unchanged from the previous trading day.

Industry News:

1. According to SMM, starting from May 30, a large alumina refinery in Shandong adjusted the purchase price of 32 per cent ionic membrane liquid caustic soda, raising it by RMB 20 per tonne from the base price of RMB 820 per tonne. The ex-factory price under the two-invoice system was set at RMB 840 per tonne (approximately RMB 2,625 per tonne converted to 100 per cent concentration).
2. Alumina Port Inventory: According to SMM statistics on May 29, the total alumina inventory at domestic ports was 25,000 tonnes, a decrease of 5,000 tonnes from the previous week.
3. According to SMM data, as of Thursday this week, the total installed capacity of metallurgical-grade alumina in China was 110.82 million tonnes per year, with a total operating capacity of 86.67 million tonnes per year. The national alumina weekly operating rate rebounded by 0.19 percentage points WoW to 78.21 per cent, mainly due to the completion of maintenance at some enterprises and the rebound in operating capacity.
4. The impact of the Guinea bauxite mining rights incident on market sentiment gradually eased this week, and transaction prices did not rise further. As of Thursday this week, the Guinea bauxite CIF price was reported at USD 74 per tonne, up USD 2 per tonne from last Thursday. Affected by the concentration of Guinea bauxite transaction prices around USD 73-75 per tonne, the SMM Import Bauxite Index rose. As of Thursday this week, the SMM Import Bauxite Index was reported at USD 74.11 per tonne, up USD 1.97 per tonne from last Thursday. There has been no progress in the Guinea bauxite mining rights incident, and bauxite suppliers are not strongly inclined to sell at low prices. However, the operating capacity of alumina has not yet rebounded significantly. In the short term, the bauxite market fundamentals are expected to remain in a surplus pattern, with general intentions to purchase bauxite at high prices. In the short term, the price of imported bauxite is expected to enter a phase of volatile adjustment.

Spot-Futures Price Spread Daily Report: According to SMM data, on May 29, the SMM Alumina Index had a premium of RMB 331.51 per tonne against the latest transaction price of the most-traded contract at 11:30.

Warrant Daily Report: On May 28, the total registered alumina warrants decreased by 2,093 tonnes from the previous trading day to 138,100 tonnes. The total registered alumina warrants in the Shandong region remained unchanged from the previous trading day at 601 tonnes. The total registered alumina warrants in the Henan region decreased by 299 tonnes from the previous trading day to 1,500 tonnes. The total registered alumina warrants in the Guangxi region remained unchanged from the previous trading day at 3,001 tonnes. The total registered alumina warrants in the Gansu region remained unchanged from the previous trading day at 5,105 tonnes. The total registered alumina warrants in the Xinjiang region decreased by 1,794 tonnes from the previous trading day to 127,900 tonnes.

Overseas Market: As of May 28, 2025, the FOB Western Australia alumina price was USD 370 per tonne, with an ocean freight rate of USD 21.95 per tonne. The USD/CNY selling rate hovered around 7.21. This price translates to approximately RMB 3,272 per tonne in terms of the external selling price at major domestic ports, which is RMB 2.28 per tonne lower than the domestic alumina price. The alumina import window is gradually opening.

This week, the weekly operating capacity of alumina continued to rebound, increasing by 1.46 million tonnes per year W-o-W to 86.67 million tonnes per year. The pressure on spot supply has further eased, and the upward momentum of spot prices has slowed down. Recent overseas alumina transactions have been relatively sluggish, with relatively small price fluctuations.

As domestic prices continue to rise, alumina imports have shifted from losses to profits, and the domestic alumina import window is gradually opening. In the short term, with the gradual resumption of production of some alumina facilities that were previously shut down for maintenance and production cuts, the supply pressure on alumina is expected to gradually ease.

The average profit margin of the alumina industry has entered a profitable state, and the market has strong expectations for alumina production resumptions. Alumina futures prices have taken the lead in pulling back, which may drive spot prices weaker. Going forward, it is necessary to continuously monitor changes in the capacity of domestic alumina enterprises, as well as the supply of imported alumina.

Note: This article has been issued by SMM and has been published by AL Circle with its original information without any modifications or edits to the core subject/data.