WEEKLY: Chinese alumina prices slip further as oversupply pressure remains

The national average price for metallurgical-grade alumina with purity above 98.6% dropped by Yuan 31/tonne ($4.4/t) or 1% from a week earlier to Yuan 2,930/t on October 23, Mysteel's price assessment showed.

Ongoing price weakness has heightened financial pressure on domestic alumina producers, market sources said. Nevertheless, most refiners showed little intention to curb output, with many prioritizing operational stability over production cuts in order to safeguard annual long-term supply contracts for the coming year, as reported.

In consequence, last week's alumina production remained broadly unchanged from the prior week. According to Mysteel's survey, total metallurgical-grade alumina output among the 44 Chinese refiners it regularly tracks reached 1.9 million tonnes over October 17-23, up by a tiny 0.05% on week.

Downstream demand also showed little improvement. Mysteel's survey of 89 primary aluminum smelters showed that their alumina consumption totalled 1.64 million tonnes during the same week, up by a marginal 0.05% from the previous week.

On the other hand, alumina inventories had climbed higher for the 21st consecutive week. As of October 23, total alumina stocks across China's ten major ports, 44 alumina refiners, 89 primary aluminum smelters, and rail yards or in transit under Mysteel's monitoring increased by 1.1% on week to 4.69 million tonnes, the highest level since early June 2022.

The latest accumulation was mainly concentrated at Chinese ports and smelters. Mysteel's data showed that alumina inventories at the 89 smelters and ten ports had risen by 53,000 tonnes and 16,000 tonnes on week to reach 3.2 million tonnes and 108,000 tonnes respectively by October 23.

The increases were largely driven by the arrival of a vessel at Fangchenggang port in Southwest China's Guangxi autonomous region carrying alumina from Vietnam, Mysteel learned. Improved rail transport capacity also facilitated the transfer of alumina from in-transit cargoes to smelters' warehouses. 

Written by Iris Pang, pangjunyu@mysteel.com