DAILY: Chinese alumina prices fall further, trading edges up

After Chinese alumina prices ticked down further on March 12, trading volume in the spot alumina market edged up, largely because buyers replenishing their feedstock could purchase the raw material at a discount, according to market watchers.

On Wednesday, the average prices for alumina with a purity level of over 98.6% in four of China's five major alumina production bases declined, Mysteel's daily price assessment showed, with those in Shanxi, Henan and Shandong provinces dropping by Yuan 20/tonne ($2.8/t) from the previous day to reach Yuan 3,310/t, Yuan 3,310/t, and Yuan 3,325/t respectively. Also, the average price in Guizhou province inched down to Yuan 3,430/t on Wednesday, lower by a small Yuan 5/t from Tuesday.

Meanwhile, the price assessed for the Guangxi autonomous region by Mysteel was still at Yuan 3,380/t on March 12, remaining unchanged for 12 working days in a row since February 25, Mysteel Global noted.

Recently, some Chinese primary aluminum smelters wanting to secure lower prices for spot alumina have purchased through open tenders, Mysteel learned, a practice that has led to more competitive pricing in the domestic spot market.

On Wednesday, Mysteel heard of one deal concluded in Shandong involving an alumina producer selling 5,000 tonnes at Yuan 3,260/t EXW to a primary aluminum smelter in North China, according to market sources. No deals had been heard the previous day, as reported.

In the overseas market on Wednesday, Mysteel heard of a 30,000 tonnes consignment of alumina from Australia settled at $420-$425/t FOB.

Meanwhile, as Washington's imposition of a 25% tariff on imported aluminum took effect on March 12, the pessimism this created about the outlook for demand for alumina and aluminum products weakened Chinese futures markets. Prices of the 12 alumina futures contracts listed on the Shanghai Futures Exchange all decreased by Yuan 22-42/t on Wednesday, with the most-traded contract for May delivery closing the nighttime trading session at Yuan 3,152/t, lower by Yuan 34/t from the settlement price of Wednesday's daytime trading session, according to the exchange's data.

Written by Iris Pang, pangjunyu@mysteel.com

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