Platts Australian alumina daily assessment up $2/mt as cheap freight attracts buyer

Platts Australian alumina daily assessment gained $2/mt Wednesday to $356/mt FOB, with low freight rates generating more buying interest and supporting the FOB market.

A producer reported the sale Wednesday of 30,000 mt at $376/mt CIF Lianyungang LC at sight, for shipment from Australia in November.

Although Platts was unable to immediately identify the buyer, multiple Chinese consumer/reseller sources appeared to validate the reported price.

Sources said while the majority of Chinese smelters have a bid ceiling of $375/mt CIF China, certain local traders may be prepared to pay $376/mt.

On another note, a trader said he was in talks to offload a few cargoes. He noted that demand from China has been relatively robust.

Offers started at $377-378/mt CIF China and discussions have been gravitating towards the mid- $370s/mt CIF China, he said.

Platts assessed the handysize freight rate at $20/mt on Wednesday for 30,000 mt of alumina to be shipped in the second-half of November from Western Australia to China's Lianyungang port.

The assessment has decreased $2/mt in the last week, driven by a steep fall in the price of bunkers over the past two weeks, and more shipping tonnage than cargoes.

In the last two months alumina price discussions in Asia have mostly been in CIF China terms rather than FOB Australia, due to extremely thin demand for spot tonnage outside of China.

Platts ex-works Henan spot alumina price stood unchanged Wednesday at Yuan 2,860/mt ($465/mt) for 70:30 cash and credit payment terms amid prevailing slow spot activity, as buyers anticipated lower prices in the near term on the back of the recent weaker domestic metal prices.

"No one is rushing to buy now as we all see prices softening for the fourth quarter, probably to around Yuan 2,800/mt," a Henan smelter said.

"Shanxi prices have already slipped this week, so we expect Henan will follow soon as well," another Henan smelter added.

A Henan refiner agreed, expecting Henan spot alumina to reach Yuan 2,800/mt cash basis by end-October to November.

In neighboring Shanxi, spot alumina offers stood at Yuan 2,750-2,850/mt cash Wednesday, down from Yuan 2,800-2,850/mt last week.

Trades were reported at Yuan 2,730-2,750/mt cash this week, compared Yuan 2,780-2,800/mt earlier.

The front-month October aluminum contract on the Shanghai Futures Exchange closed at Yuan 13,710/mt Wednesday, down from Yuan 13,920/mt last week, and from Yuan 14,585/mt at the beginning of September.

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