Guangxi¡¯s alumina prices down to RMB 2,380/mt entice aluminum smelters

SMM’s latest survey reveals that alumina prices in Guangxi have dropped to RMB 2,380/mt, down nearly RMB 200/mt or 8% from the same period last year. Depressed aluminum prices and excess alumina supply in Guangxi are the major reasons behind the decline in alumina prices.

Alumina traders in Guangxi told SMM that local alumina ex-works prices have always been the lowest across China due to higher freight charges from longer distance. Guangxi Investment Group, the largest aluminum producers in Guangxi, has cut a total of 290,000 mt/yr in aluminum capacity at its two subsidiaries so far this year. This ate into local alumina demand, thereby creating a supply glut of alumina there.

SMM has confirmed that Guangxi Jinjiang Group’s Tiandong alumina project entered operations early this year, with close to 600,000 mt/yr capacity now in operations. Alumina output at Chalco (Guangxi) and Guangxi Xinfa Alumina has been growing. Combined with alumina capacity in operations at Guangxi Huayin Alumina, total alumina capacity in operations in Guangxi is now at 6.1 million mt/yr, far outpacing demand from local aluminum smelters.

An aluminum smelter in Hunan informed SMM that it has been sourcing alumina from Guangxi so far this year because of lower prices there and that it has delayed plans of buying imported alumina and alumina from Shanxi. The producer predicts that growing alumina supply and falling alumina prices in Guangxi will send alumina prices in the other regions down as well and that more aluminum producers will purchase alumina from Guangxi.

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