For the week of June 15-22, domestic alumina spot prices edged higher, with market trading activity remaining relatively steady. According to Mysteel's price assessment, the weighted national average spot price for smelter-grade alumina (minimum purity 98.6%) stood at Yuan 2,755/tonne on June 22, up from Yuan 2,731/tonne at the start of the period.
On the supply side, a smelter in Shanxi recently halted feeding at its digestion stage due to red mud disposal issues. Currently, only limited inventory remains in the system and storage silos. The refinery is currently drawing down stocks to ensure supply to its captive downstream operations. This situation has boosted inquiry and purchasing activity from downstream consumers and traders. Coupled with high-level fluctuations in futures prices, this has bolstered sellers' resolve to hold firm on offers. Consequently, transaction prices have diverged significantly, while overall trading activity remained weak.
On the demand side, Mysteel's data show that domestic primary aluminum smelters consumed approximately 1.6692 million tonnes of alumina last week, up by 600 tonnes from the previous week. Recent domestic aluminum operating capacity stands at around 45.24 million tonnes/year, running steadily across regions, with some downstream players still facing rigid restocking needs.
Last week, China's total traders' alumina inventory reached 6.238 million tonnes, up 14,000 tonnes week-on-week. Earlier in Guangxi, an unplanned outage at a local refinery triggered north-to-south cargo transfers to secure feedstock supply for downstream smelters. However, subsequent output cuts in northern producing areas disrupted some long-term contract deliveries and tightening spot availability. Nevertheless, substantial volumes remain stored at rail stations and delivery warehouses, with a large volume of exchange warrants set to expire in June, leading to heightened willingness among futures-spot traders to quote and offload stock.
In summary, another unexpected production halt due to force majeure prompted some holders to raise their offer levels. Downstream buyers, assessing their own inventory positions, carried out selective restocking. In the south, new capacity additions and output cuts coexisted, leaving the regional market in short-term tight balance, with overall spot availability tightening and sellers gaining stronger bargaining power. As the price gap between northern and southern China widens, cross-regional flows are expected to become more frequent.
Additionally, three major enterprises have experienced operational disruptions since the start of the year, leading to reduced efficiency in fulfilling long-term contracts, further tightening supply conditions in the short term. However, with the expiration of a large number of warrants and ongoing uncertainties regarding bauxite import policies, the market remains locked in intense negotiations between buyers and sellers. Prices this week are expected to remain stable with a firm undertone, likely ranging between Yuan 2,750-2,850/tonne.
Written by Regina WANG
wangjiaqie@mysteel.com
