Chinese Alumina Rises Further on Strong Sentiment, Higher Offers

Chinese spot alumina prices firmed further Tuesday as market sentiment remained strong and offer levels continued to rise, sources said.

The ex-works Shanxi alumina price stood at Yuan 1,840/mt ($276/mt) full cash terms, up Yuan 40/mt from Monday, and up Yuan 90/mt week on week and Yuan 140/mt month on month.

In Henan province, tradeable spot alumina prices were indicated at Yuan 1,850-1,880/mt cash, up from Yuan 1,830-1,850/mt previously. Ex-works Guangxi prices were also heard higher at between Yuan 1,800-1,850/mt cash Tuesday, compared with Yuan 1,750-1,800/mt last week.

Prices have been on an uptrend in recent weeks after two refineries shut in Henan and Shanxi — Henan Wanji Aluminium’s 1.2 million mt/year refinery earlier this month due to red mud issues, and Chalco’s 2 million mt/year Shanxi plant last week on flooding and water supply issues.

Offer levels have rallied since and several spot trades have reportedly been concluded at higher levels, driving market sentiment.

“Refiners are still quoting higher today. We are hearing offers at Yuan 1,900-1,950/mt cash now, for both Shanxi and Henan spot,” a Henan smelter source said. He indicated tradeable spot at Yuan 1,830-1,840/mt cash to 50% credit terms for both Shanxi and Henan regions.

Another Henan smelter said he would pay up to Yuan 1,850/mt cash for ex-works Henan alumina as he expected prices to test higher and range from Yuan 1,850-1,900/mt cash in September.

A Western trader who bought Henan spot recently at Yuan 1,850/mt cash said prices might break above Yuan 1,900/mt near term. He also indicated ex-works Shanxi prices at Yuan 1,830-1,840/mt cash to partial credit terms.

“Everyone is expecting higher prices, definitely reaching Yuan 1,900/mt soon. So, smelters have no choice. They have to pay more if they want to buy now,” a Beijing trader said.