WEEKLY: China's alumina stocks rise to 6-m high with sizable arrivals at ports

Surging inventories at some major Chinese ports were the dominant contributor to the rise in last week's alumina stocks, market watchers noted. The volume of alumina stockpiled at China's ten major ports Mysteel monitors totalled 51,000 tonnes as of April 3, swelling by 23,000 tonnes or 82.1% from a week ago, the survey results showed.

Significant increases of 18,000 tonnes and 7,000 tonnes were seen at Jinzhou port in Northeast China's Liaoning and Fangchenggang port in Southwest China's Guangxi respectively. The portside inventory accumulation was partly because of higher arrivals of imported alumina during the survey week for the production of high-purity aluminum, market insiders learned.

In addition, the on-week rise of 12,000 tonnes of alumina piled at rail freight yards or in transit under Mysteel's monitoring was another factor behind the climb in last week's alumina inventories. Following the shortfall in automobile transport services during the previous week, more shipments were carried by rail freight last week, leading to a growing volume of alumina stored at rail terminals, market sources said.

However, the total alumina production at the 44 Chinese alumina refiners sampled in Mysteel's survey dipped by 0.1% on week to 1.73 million tonnes over March 28-April 3, though the volume was still 9.2% higher than the prior year level.

The marginal weekly decline in alumina output was attributed to production reduction at a refiner in Central China's Henan, which suspended operations last week to conduct an overhaul on its 500,000 tonnes/year production line, Mysteel learned.

Meanwhile, spot alumina prices declined further amid bearish market sentiment last week, which also dampened alumina refiners' production enthusiasm. The average prices for alumina with a more than 98.6% purity in China's five major alumina production bases -namely Shanxi, Henan, Shandong and Guizhou provinces and the Guangxi autonomous region - over March 28-April 3 slipped lower to Yuan 3,040-3,154/tonne ($414-429/t), down by Yuan 73-128/t from March 21-27. 

Written by Iris Pang, pangjunyu@mysteel.com