DAILY: Chinese alumina prices climb further in spot, futures markets

Meanwhile, regional price assessments for the same grade of spot alumina rose across China's five major alumina production hubs. The assessed prices in Shandong, Henan, Shanxi, and Guizhou provinces and in the Guangxi autonomous region all increased by Yuan 5/t on day, averaging between Yuan 2,640/t and Yuan 2,755/t last Friday.

The same day, Shanghai alumina futures continued to gain ground following the prior two days of strengthening. The most-traded May alumina contract on the Shanghai Futures Exchange jumped 2.43% during Friday's daytime trading session and rose a further 1% in nighttime trading, closing at Yuan 2,962/t as of 1 a.m. last Saturday.

The continued increase in global oil prices since the escalation of tensions in the Middle East has pushed up shipping costs for imported bauxite, a key raw material used in China's alumina refining, lending support to Chinese alumina prices in both spot and futures markets, according to market analysts. Mysteel's price assessments showed that average freight rates for Capesize vessels from Guinea and Panamax vessels from Australia increased by $3/t and $2/t on day respectively, reaching $31/t and $19/t on March 13.

In the physical market, some alumina producers and traders in China further raised their spot offers. However, many primary aluminum smelters remained cautious about making purchases, mindful that the domestic alumina supply is expected to remain ample over the longer term.

As a result, spot trading activity in the domestic market was subdued, with Mysteel not hearing of any concluded deals.

In contrast, trading activity in the overseas market was more active, with three deals totaling 90,000 tonnes reported on March 13. One 30,000-tonne cargo was traded at $297/t FOB Western Australia for late-March shipment, while another 30,000-tonne cargo was concluded at $298/t FOB Western Australia for late-March or early-April shipment. On the same day, a third 30,000-tonne cargo was sold at $332/t CIF China for late-March shipment.

Written by Iris Pang, pangjunyu@mysteel.com