Asia alumina: Down $2/mt on global stock-build, China's credit woes

The Platts Australian alumina daily assessment slipped $2 from Friday to $346/mt FOB, dragged down by the global stock build and mounting pressure to liquidate.

Widespread credit and cash shortages in China and very low domestic smelting margins have temporarily lowered the number of eligible buyers in China.

In the last week, market participants have reported being aware of available tonnage of Australian, Brazilian, Indian and Jamaican origins.

On Monday, a participant reported knocking back the chance to buy a large parcel from the Atlantic region for shipment between the first and second quarters.

In recent days, bid, ask levels have been at $360-$365/mt CIF China and $345-350/mt FOB Australia. Due to accumulating stocks, consumer, producer and trader sources have said it has increasingly become a buyers' market.

Last Thursday a western trader made a firm open offer of a 30,000 mt parcel at $365/mt CIF Lianyungang LC at sight or 30 days credit, for shipment between the second half of February and March. There there were no takers.

A number of consumer/resellers put buyers guidance at $360/mt CIF.

The Australian market continued to track China's domestic prices, as the mainland remained the single largest prospective buyer of alumina in the international open market.

The Platts ex-works Henan alumina price at Yuan 2,720/mt ($443/mt) for 70:30 cash and credit payment, was unchanged from Friday but down Yuan 30 from a week earlier.

The port price at Lianyungang was also around Yuan 2,720/mt.

Domestic spot trade activity remained lackluster as buyers continued to stay on the sidelines in anticipation of lower prices, sources said.

On Monday, a Henan refiner expressed keen interest to sell, but said he was not offering February spot yet.

"We are still checking the market for an acceptable trade level. It's a buyer's market now and they are in no rush as they see the market softening further," the refiner said.

"We don't want to hold much reserves now and are using up term contract supplies as well...metal prices are weak and cash flow is tight," a Henan smelter source said.

Henan cash prices are expected to range between Yuan 2,600-2,650/mt in the near term, down from a current range of Yuan 2,650-2,700/mt.

The front-month February aluminum contract on the Shanghai Futures Exchange closed Monday at Yuan 12,700/mt, down from Yuan 12,800/mt last week, and also from Yuan 13,100/mt a month earlier.

Copyright and Exemption Declaration :¢ÙAll articles, pictures and videos that are marked with "China Aluminum Network" on this website are copyright and belong to China Aluminium Network (www.alu.com.cn). When transshipment, any media, website or individual must list the source from "China Aluminium Network (www.alu.com.cn)". We seek legal actions against anyone that disobey this. ¢ÚArticles that marked as copy from others are for transferring more information to readers, do not represent or endorse their opinions or accuracy and reliability. When other media, website or individuals copy from our website, must keep the source. Anyone that changes the articles' sources will hold the responsibilities for copyright and law problems. We also seek legal actions against anyone that disobey this. ¢ÛIf any articles copied by our website concern the copyright and other problems, please contact us within one week.