DAILY: Chinese alumina prices decline further, trading lighter

Chinese alumina prices in the spot and futures markets kept declining on March 18. Lighter trading was seen in the domestic spot market on Tuesday, with the weak sentiment leading some alumina producers and traders to sell low, market watchers noted.

The average prices for alumina with a purity level of over 98.6% in China's five major alumina-producing areas all dropped on March 18, with those in Shanxi and Henan provinces both edging lower by Yuan 15/tonne ($2.1/t) from March 17 to reach Yuan 3,225/t and Yuan 3,235/t respectively, Mysteel's daily price assessment showed. The prices had decreased for the seventh consecutive working day in Shanxi and for the ninth straight working day in Henan, the data show.

Meanwhile, the average prices of the same grade in Shandong and Guizhou provinces and the Guangxi autonomous region declined by Yuan 40/t from Monday to Yuan 3,195/t, Yuan 3,340/t, and Yuan 3,330/t respectively on Tuesday, the tracking data show. The slip in the assessed price for Guangxi material was a first after the price had stayed unchanged for 15 working days, Mysteel Global noted.

The market for alumina derivatives also headed lower on March 18. Prices of the 12 alumina futures contracts listed on the Shanghai Futures Exchange (SHFE) all decreased by Yuan 23-45/t, with the most-traded contract for May delivery closing the nighttime trading session at Yuan 3,060/t as of 1:00 am Wednesday, lower by Yuan 44/t from the settlement price of Tuesday's daytime trading session, according to the SHFE's data.

Weak alumina spot and futures prices have prompted some Chinese alumina producers and traders to sell spot goods at a lower price to deplete their alumina inventories recently, according to market analysts, with trading settled at a price lower than the average spot price on March 18.

One deal involving 2,000 tonnes was heard concluded on Tuesday, compared to one deal of 5,000 tonnes on Monday. A trader in Guangxi sold the 2,000 tonnes at Yuan 3,310/t to a primary aluminum smelter in the same region, with the settlement price being lower than the average price of Yuan 3,340/t assessed by Mysteel for the area by Yuan 20/t, Mysteel Global noted.

Written by Iris Pang, pangjunyu@mysteel.com

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