WEEKLY: Output cuts trim China alumina prices while stocks stay high

During January 23-29, alumina prices held largely stable but continued to be soft. Mysteel's price assessment showed that the national spot price for metallurgical-grade alumina edged down by 0.3% on week to average Yuan 2,648/tonne ($381/t) as of January 29. The pace of decline had slowed from the 0.6% drop recorded the previous week, however.

Meanwhile, alumina production fell for a second consecutive week. The 44 Chinese refiners tracked by Mysteel produced a total of 1.83 million tonnes of smelter-grade alumina during the January 23-29 week, down 0.5% from the previous week, according to Mysteel's survey.

The modest decline reflected output curtailment at a refinery in Shanxi and at another in Guizhou province last week, where production was reduced for output adjustment or to cut operating costs. In addition, two refiners in the Guangxi autonomous region partially halted operations to carry out routine maintenance on their calciners.

On the other hand, alumina inventories extended their build. Mysteel's survey showed that as of January 29, total alumina stocks at China's 10 major ports, 44 alumina producers, 89 primary aluminum smelters, and rail yards or in transit rose by 1.4% from a week earlier to a fresh record high of 5.6 million tonnes.

Ahead of the upcoming Chinese New Year holiday in mid-February, concerns over potential transportation disruptions prompted some smelters and refiners to accelerate alumina deliveries under long-term contacts. As a result, by last Thursday inventories at smelters and at rail yards or in transit had increased by 1.8% and 1.6% on week to 3.8 million tonnes and 1.4 million tonnes, respectively.

Moreover, imported alumina continued to arrive at northern ports. Portside inventories across the 10 major Chinese ports climbed by 6% from the previous week to 178,000 tonnes as of January 29. Panjin port in Northeast China's Liaoning province recorded the sharpest increase, with stocks surging by 150% on week. 

During the same survey week, alumina consumption stayed broadly stable, with the volume of alumina consumed by the same 89 smelters sampled in the survey edging up by 0.14% from a week earlier to 1.65 million tonnes, Mysteel's tracking data showed.

Written by Iris Pang, pangjunyu@mysteel.com