DAILY: China's spot alumina prices nudge down, trading inactive

China’s spot alumina prices mostly edged lower on March 11, while futures prices remained stable. On the same day, alumina trading was subdued in the domestic market as generally steady production nationwide pressured spot alumina prices and trading volume, industry watchers noted.

On March 11, the average prices for alumina with a more than 98.6% purity in three of China's five major alumina production areas softened. The average prices in Central China's Henan and East China's Shandong both dropped by Yuan 10/tonne ($1.4/t) from Monday to reach Yuan 3,330/t and Yuan 3,345/t respectively on Tuesday, according to Mysteel's daily price assessment. The price in North China's Shanxi dipped further on March 11 to Yuan 3,330/t, lower by Yuan 15/t from March 10.

On the other hand, prices for the same grade of alumina in Southwest China's Guizhou and Guangxi were assessed unchanged by Mysteel from Monday at Yuan 3,435/t and Yuan 3,380/t respectively on Tuesday. The price assessment for Gungaxi had remained flat for the 11th straight working day since February 25, Mysteel Global observed.

Despite news that a large alumina refiner in Southwest China has scheduled a plant overhaul for early April, that the 4.8 million tonnes/year capacity plant will be offline for a period of time has not triggered panic among buyers. This is because other domestic alumina producers will mostly maintain normal production to fulfill their long-term contracts, market insiders explained.

Consequently, the assumption that alumina production will remain stable has meant that spot alumina prices and trading volume have minimal scope to rise, according to market analysts.

In the domestic spot alumina market on March 11, trading was inactive, with Mysteel not hearing of any deals being concluded, compared to one deal on March 10. By contrast, alumina trading in the overseas market was active on Tuesday, with Mysteel learning of a 35,000 tonnes consignment traded at $440/t FOB Indonesia yesterday.

In the futures market meanwhile, prices of the 12 alumina futures contracts listed on the Shanghai Futures Exchange (SHFE) were mixed but largely stable on Tuesday, with the most-traded contract for May delivery closing the nighttime trading session at Yuan 3,196/t, higher by a small Yuan 3/t from the settlement price of Tuesday's daytime trading session, the SHFE data showed.

Written by Iris Pang, pangjunyu@mysteel.com

Edited by Russ McCulloch, russ.mcculloch@mysteel.com