DAILY: China's spot alumina prices continue to soften

Mysteel assessed the national average spot price for metallurgical-grade alumina with a minimum purity of 98.6% at Yuan 2,731/tonne ($400.6/t) including 13% VAT on Tuesday, down by another Yuan 12/t from Monday. This marked the lowest price level in nearly a month, Mysteel Global noted.

Regionally, price assessments in China's five major alumina production bases all weakened further. The assessed price for the same grade of alumina in Guangxi fell by Yuan 20/t on day to Yuan 2,710/t, while that in Shanxi recorded a daily decline of Yuan 15/t to Yuan 2,720/t. Prices in Shandong and Henan dropped by Yuan 10/t each to sit at Yuan 2,685/t and Yuan 2,730/t, respectively. In Guizhou, the decrease was more modest, with the assessed price easing by Yuan 5/t to Yuan 2,810/t.

In the derivatives market, the most-traded alumina contract on the Shanghai Futures Exchange for May delivery edged up by 0.3% during Tuesday's daytime session but retreated in nighttime trading, slipping by 0.61% to close at Yuan 2,624/t by 1 a.m. Wednesday.

Sentiment in the physical market remained pessimistic, weighed by an outlook of looser supply amid the ramp-up of newly commissioned capacity, the impending maturity of alumina warrants, and increased inflows of imported alumina. This anticipation led some alumina sellers to continue lowering their offers to facilitate sales.

On the demand side, primary aluminum smelters with raw material replenishment demand generally maintained a cautious procurement strategy, opting to purchase either via tenders or in the spot market at lower price levels.

Mysteel heard of two concluded transactions involving 24,000 tonnes of alumina yesterday in the domestic spot market. A smelter in Gansu procured 20,000 tonnes of North China-origin alumina via tender at a delivered price of Yuan 2,830/t including freight and the VAT. And a trader sold 4,000 tonnes of Henan-origin alumina to a smelter at Yuan 2,680/t EXW including the VAT, with the material delivered to the smelter's facilities in Henan and Sichuan.

In the overseas market, Mysteel noted two finalized deals for alumina the same day. A 30,000-tonne cargo was concluded at $336.5/t CIF China for June shipment, while another 20,000-tonne consignment was traded at $336/t CIF China also for June shipment.

Written by Iris Pang, pangjunyu@mysteel.com

Edited by Alyssa Ren, rentingting@mysteel.com