WEEKLY: Supply disruptions keep China's alumina prices largely steady

Mysteel assessed the national average spot price for smelter-grade alumina with a minimum purity of 98.6% at Yuan 2,696/tonne ($395/t) on April 23, marking a marginal decline of 0.5% from a week earlier. The price drop slowed compared with the 2% on-week decrease recorded in the prior week, Mysteel Global noted.

The moderation in price declines was mainly attributed to an unexpected supply disruption during the week, according to market watchers. Around April 18, a major alumina producer with an annual capacity of 4.4 million tonnes in Southwest China's Guangxi autonomous region suddenly suspended operations due to a boiler failure, market sources learned. When the plant will resume production remains unclear.

This sudden outage heightened market concerns about tightening alumina supply in the near-term, particularly as newly commissioned capacity has yet to translate into spot availability. As a result, alumina prices found support despite the overall downward trend.

Reflecting the impact of the disruption, national alumina output declined during the same period. Total production of metallurgical-grade alumina during April 17-23 among the 44 refiners tracked by Mysteel fell by 1.3% on week to 1.77 million tonnes, Mysteel's survey results showed. This marked the sharpest weekly decline since late December last year, Mysteel Global noted.

Meanwhile, inventory levels continued to rise, albeit at a slower pace. As of April 23, total alumina stocks across China's 10 major ports, 44 alumina producers, 89 primary aluminum smelters, and rail yards or in-transit had ticked up by a modest 0.14% from a week ago to 5.9 million tonnes, easing from the previous week's 0.34% increase, according to Mysteel's survey. 

Written by Iris Pang, pangjunyu@mysteel.com

Edited by Russ McCulloch, russ.mcculloch@mysteel.com