DAILY: China's alumina prices mostly weaken in spot, futures markets

On Wednesday, Mysteel's assessments for spot prices for smelter-grade alumina with more than 98.6% purity dropped by Yuan 5/tonne ($0.7/t) from Tuesday in three of China's five key production hubs - Shandong, Henan, and Shanxi provinces - to average between Yuan 3,205/t and Yuan 3,240/t, while those in Guizhou province and the Guangxi autonomous region were unchanged at Yuan 3,320/t and Yuan 3,325/t respectively.

The softening of spot alumina prices in the three provinces echoed lower offers from local sellers, according to market watchers. Market expectations of an alumina oversupply continued to build in northern regions, prompting some sellers there to offload alumina stocks in hand by trimming their offer prices amid weak demand.

In contrast, the resumption of production at several primary aluminum smelters in Southwest China kept steady immediate demand for alumina, helping to support firm spot prices in the region.

Overall, alumina buyers were cautious, anticipating a possible loosening of alumina availability in the spot market. As a result, trading activity was muted on August 13, with Mysteel hearing of no concluded deals during the day.

In the derivatives market, domestic alumina futures retreated yesterday after a rebound seen the previous day. The most-traded alumina contract for next January delivery on the Shanghai Futures Exchange fell by 0.92% during Wednesday's daytime session and extended losses to close the nighttime session 1.57% lower.

Written by Iris Pang, pangjunyu@mysteel.com