DAILY: Chinese spot alumina prices largely flat, futures gain further

According to Mysteel's daily price assessment, the national average spot price for metallurgical-grade alumina with a minimum purity of 98.6% came in at Yuan 2,648/tonne ($381/t) including the 13% VAT on Wednesday, nudging down by Yuan 1/t from the day prior.

The stability in prices reflected sparse price inquiries and quotations in spot alumina markets across most of China's five major alumina-producing regions. Assessed spot alumina prices in Shandong, Shanxi, and Guizhou provinces and in the Guangxi autonomous region all stayed unchanged from the previous day, averaging between Yuan 2,555/t and Yuan 2,740/t on Wednesday. In contrast, the price in Henan province fell by a further Yuan 5/t on day to sit at Yuan 2,635/t.

In the derivatives market, alumina futures continued to gain ground. The most-traded alumina contract on the Shanghai Futures Exchange for May delivery jumped by 3.27% in Wednesday's daytime trading and extended the rally by a further 1.81% overnight to close at Yuan 2,820/t by 1 a.m. Thursday. This marked the contract's highest price level in more than two weeks. 

Despite the strength in futures, trading activity for spot alumina remained muted yesterday, with both alumina buyers and sellers adopting a wait-and-see stance. With adequate feedstock inventories on hand, primary aluminum smelters either showed limited restocking interest or were only willing to procure the feed at lower prices. Meanwhile, many alumina refiners and traders were reluctant to lower offers, underpinned by recent production curtailments.

Mysteel did not hear of any concluded deals in the domestic spot market on Wednesday. However, two overseas deals totalling 60,000 tonnes of alumina were finalized on the same day. A 30,000-tonne cargo was traded at $325/t FOB Jamaica, while another 30,000-tonne deal was concluded at $327/t FOB Brazil, both for March shipment.

Written by Iris Pang, pangjunyu@mysteel.com