SMM Alumina Morning Comment on January 6
Futures Market: During the overnight session, the most-traded alumina 2502 futures contract opened at 4,397 yuan/mt, reached a high of 4,397 yuan/mt, a low of 4,299 yuan/mt, and closed at 4,343 yuan/mt, down by 135 yuan/mt or 3.02%, with an open interest of 115,000 lots.
Industry Dynamics:
- Overseas Alumina Transactions: On January 3, 30,000 mt of alumina was transacted overseas at a price of $681/mt FOB Western Australia, with shipment scheduled for early March.
- Alumina Port Inventory: According to SMM statistics on January 3, domestic port alumina inventory totaled 48,000 mt, down by 48,000 mt from the previous week.
- Bauxite Port Inventory: According to SMM statistics on January 3, bauxite inventory at nine domestic ports totaled 13.98 million mt, down by 860,000 mt from the previous week.
- The Ministry of Industry and Information Technology (MIIT) and five other departments jointly issued the "Action Plan for Comprehensive Utilisation of Red Mud." The plan aims to significantly enhance the comprehensive utilisation of red mud by strengthening innovation, reducing red mud at the source, improving usability, increasing utilisation capacity, expanding utilisation scale, diversifying application scenarios, and reinforcing policy support and resource guarantees. It seeks to promote the green and coordinated development of the red mud utilisation and alumina industries. The plan sets targets for 2027, aiming for significant progress in red mud utilisation with an additional utilisation rate of 15%. By 2030, the utilisation level is expected to improve further, with an additional utilisation rate of 25%, forming a sustainable development model with coordinated efforts across the industry chain and simultaneous growth in the volume and efficiency of red mud utilisation.
Spot-Futures Price Spread Daily Report: According to SMM data, on January 3, the SMM alumina index showed a premium of 1,190 yuan/mt against the most-traded contract's latest transaction price at 11:30.
Warehouse Warrant Daily Report: On January 3, the total registered warehouse warrants for alumina remained unchanged from the previous trading day at 12,300 mt. In Shandong, Henan, and Gansu regions, the total registered warehouse warrants remained at 0 mt. In Guangxi, the total registered warehouse warrants remained at 301 mt, and in Xinjiang, they remained at 12,000 mt.
Overseas Market: As of January 3, the FOB Western Australia alumina price was $670/mt, with an ocean freight rate of $22.45/mt. The USD/CNY exchange rate sell price was around 7.33. This price translates to an external selling price of approximately 5,814 yuan/mt at major domestic ports, which is 174 yuan/mt higher than domestic alumina prices. The alumina import window remains closed.
Summary: Recently, the weekly operating rate of alumina has rebounded slightly, leading to a slight increase in alumina supply. However, with technological transformations and production cuts in aluminum smelters in Guangxi, Sichuan, and other regions, alumina demand has slightly declined. The previously tight alumina supply has eased. By the end of December, alumina raw material inventory at aluminum smelters had rebounded slightly, while downstream restocking and purchasing enthusiasm weakened. Acceptance of high-priced spot alumina has decreased, and with reports of some low-priced transactions, suppliers have shown an increased willingness to sell. In the short term, spot alumina prices are expected to maintain a slight downward trend.
[The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make cautious decisions and not substitute this for independent judgment. Any decisions made by clients are unrelated to SMM.]
