DAILY: China's alumina prices dip further, trading quiet

Alumina prices in China’s spot and derivatives markets continued softening on March 13 as stock levels became an issue, Mysteel Global learned.

Trading in the spot market was quiet on Thursday, as buyers' inventory levels have become relatively high over the past week, market watchers explained, indicating that demand among primary smelters was tepid.

On Thursday, the average prices for alumina with a more than 98.6% purity in three of China's five key alumina-producing regions edged lower, with those in Shanxi and Henan provinces both slipping by Yuan 10/tonne ($1.4/t) from Wednesday to reach Yuan 3,330/t, according to Mysteel's daily price assessment. Similarly, the average price in Shandong province dropped to Yuan 3,305/t on March 13, lower by another Yuan 20/t from March 12.

On the same day, the average prices in Guizhou province and the Guangxi autonomous region remained flat from Wednesday at Yuan 3,430/t and Yuan 3,380/t respectively, Mysteel's tracking data showed. The price assessment for Guangxi had marked time for the 13th straight working day since February 25, Mysteel Global noted.

As the primary smelters' stocks of alumina have mounted this week, those aluminum producers holding sufficient inventories had weak demand for the raw material, according to industry watchers. Mysteel's latest survey showed that as of March 13, alumina stockpiled at the 89 surveyed primary aluminum smelters under Mysteel's regular tracking totalled 2.88 million tonnes, higher by 23,000 tonnes on week. The inventory level was also the highest in six months, Mysteel Global observed.

Consequently, buyers were evidently undecided about purchasing in the spot market on Thursday as Mysteel did not hear of any deals being concluded in ether the domestic and overseas markets, compared to one deal heard in each market yesterday.

Meanwhile, the market for alumina futures was still weak on March 13. Prices of the 12 alumina futures contracts traded on the Shanghai Futures Exchange (SHFE) all lost some ground on Thursday, with the most-traded contract for May delivery dropping to Yuan 3,125/t by the close of the nighttime trading session, down by Yuan 27/t from the settlement price of Thursday's daytime trading session, the SHFE's data showed.

Written by Iris Pang, pangjunyu@mysteel.com

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