DAILY: Chinese alumina prices move higher in spot, futures markets

Chinese alumina prices moved higher in both the spot and futures markets on June 12, mainly supported by near-term alumina tightness and potential tighter imported bauxite supply.

At the national level, the average price for smelter-grade alumina with a minimum purity of 98.6% was assessed by Mysteel at Yuan 2,729/tonne ($403.8/t) last Friday, moving up by a larger Yuan 12/t on day and marking a nearly two-month high, Mysteel Global noted.

The upward momentum was largely driven by firmer prices in three of China's five key alumina production bases. In Shandong, Henan, and Shanxi, assessed prices for the same grade of alumina jumped by Yuan 20/t on day to average between Yuan 2,715/t and Yuan 2,740/t.

In contrast, the prices in Guangxi and Guizhou remained unchanged at Yuan 2,670/t and Yuan 2,780/t respectively.

Meanwhile, domestic alumina futures also strengthened further. The most-traded September contract on the Shanghai Futures Exchange increased by 1.07% during Friday's daytime trading and extended gains by a further 0.86% overnight, closing the nighttime session at Yuan 2,947/t by 1 a.m. last Saturday.

Firm sentiment, supported by relatively tight spot alumina availability in some regional markets and concerns over potential tightening of imported bauxite supply from Guinea, encouraged alumina producers and traders to either raise offering prices or hold them steady, with limited urgency to sell off stocks.

On the demand side, downstream primary aluminum smelters remained cautious, resisting higher prices and largely adopting a wait-and-see approach to procurement. Trading activity was sparse, with Mysteel not hearing of any concluded deals.

Written by Iris Pang, pangjunyu@mysteel.com

Edited by Alyssa Ren, rentingting@mysteel.c om