Australian alumina dips to $333/mt on abundant supply

Platts Australian alumina assessment fell 50 cents to $333/mt FOB weighed down by global alumina longs and weak demand.

Three larger than standard-sized cargoes were heard being shifted from the western world to Chinese ports, as China remains the primary buying hub for alumina in the Asia Pacific region, market sources said. The seller would likely have to bear the additional freight burden, they added.

The increasingly conspicuous long positions in the western world have put further downward pressure on the Australian market, consumer and trader sources said. As smelter curtailments have not been matched by refinery cuts, the western world has been long in alumina for months.

Clearer direction is expected in the next two weeks when Chinese participants return from their holidays February 7. Outlook for Chinese alumina buying appetite appears to be mixed. Bullish sources said that the Chinese may be keen to restock post Lunar New Year, and Australian spot appears to be unavailable.

Bearish sources were of the view that there may be announcements on smelter curtailments as many Chinese smelters were loss-making at the low domestic aluminum prices on the Shanghai Futures Exchange.

"The metal price is depressed and alumina production globally is still at record levels. Why would the Chinese buy at these levels, when they have options from multiple supply sources?" a consumer added.

Low aluminum prices on the LME continued to weaken sentiments in the alumina market. LME aluminum cash prices closed at $1,662.75/mt Wednesday, up marginally from $1,641.25/mt Tuesday, but down significantly from $1,755.25/mt at the start of the new year.

China is closed for new year celebrations from January 31 through February 6.

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