WEEKLY: Chinese alumina stocks climb to new high

As of December 11, total alumina stocks across the country's 10 major ports, 44 alumina producers, 89 primary aluminum smelters, and rail yards or in transit under Mysteel's regular tracking had reached 5.06 million tonnes, according to results of Mysteel's latest survey. This represented another 1.1% increase from the previous week and renewed the highest level since Mysteel began the survey in January 2022.

The inventory buildup has now extended for 28 consecutive weeks since early June this year, Mysteel Global noted.

Last week's stock accumulation was primarily driven by rising in-transit stocks of domestically traded alumina, market watchers explained. Unloading congestion at some ports, coupled with adverse weather conditions in North China, slowed or disrupted highway transportation, leading to alumina cargos in transit to mount. Mysteel's survey showed that as of December 11, alumina volumes at rail yards or in transit had climbed by 5.4% on week to 1.2 million tonnes, also the highest level since January 2022.

During the survey week, most domestic alumina refiners continued to produce at normal rates, although some scaled back output to carry out routine calciner maintenance or in response to environmental inspections in North China. The 44 producers that Mysteel regularly tracks produced 1.86 million tonnes of metallurgical-grade alumina during the December 5-11 week, down marginally by 0.1% from the prior week and returning to levels seen two weeks earlier, the survey found. 

Though large-scale or concentrated production cuts have not occurred so far, a further decline in spot alumina prices could potentially prompt producers already operating at cash losses to adopt more flexible production strategies in the near term, market analysts suggested.

During last week, alumina demand from primary aluminum smelters also remained steady. The volume of alumina used by the same 89 smelters ticked up by a tiny 0.04% on week to 1.64 million tonnes over December 5-11, according to the survey findings. 

Meanwhile, spot alumina prices weakened further over the same week. On December 11, Mysteel assessed the national average spot price for smelter-grade alumina with purity exceeding 98.6% at Yuan 2,796/tonne ($397/t), down by 1.7% from a week earlier. 

Written by Iris Pang, pangjunyu@mysteel.com