WEEKLY: Chinese alumina prices ease under supply pressure

On the supply side, domestic alumina output remained largely steady last week. The 44 alumina producers under Mysteel's monitoring nationwide still produced 1.85 million tonnes of metallurgical-grade alumina during September 19-25, nudging down by 0.3% on week after a 1.2% rise recorded in the previous week, according to results of Mysteel's latest survey.

The marginal dip was largely due to maintenance stoppages. An alumina refiner in Southwest China's Guangxi suspended an 800,000 t/y production line for two weeks starting in mid-September, while another in North China's Hebei began maintenance on a 400,000 t/y line on September 22, with the restart date still unclear.

Nevertheless, alumina production across most regions of China remained stable, leaving overall spot alumina supply relatively ample, particularly in northern parts of China, market watchers noted.

On the demand side, more primary aluminum smelters in China replenished alumina in the past week to secure sufficient raw materials for their production during the upcoming National Day holiday over October 1-8. Meanwhile, most alumina supplies ahead of the holiday were for long-term contract fulfillment, constraining alumina liquidity in the spot market to some extent, according to market watchers. 

During the latest survey week, the 89 smelters under Mysteel's regular tracking consumed 1.64 million tonnes of alumina, largely unchanged from the prior week with a minimal 0.04% uptick.

Last week also saw further accumulation of alumina inventories. As of September 25, total alumina stocks held at China's 10 major ports, 44 producers, 89 smelters, and rail yards or in transit reached 4.5 million tonnes, the highest level since mid-November 2023. The volume was 1% higher on week and marked rises for 17 consecutive weeks, the survey showed.

Contributing most to the build-up were growing stockpiles at smelters and rail yards due to increased replenishment and constrained logistics capacity before the holiday. By September 25, inventories at smelters and rail yards both rose by 23,000 tonnes from the previous week to 3.17 million tonnes and 1.04 million tonnes, respectively. 

Arrivals of imported alumina at ports also added pressure, with the tonnage piled at China's 10 major ports up by 1.4% on week to 72,000 tonnes by the same day, according to the survey.

Written by Iris Pang, pangjunyu@mysteel.com