China's alumina imports decline 40% YoY in June

Alumina imports of China declined 117,200 mt MoM and 40.01% YoY to 223,300 mt in June, according to customs data.

Shanghai Metals Market (SMM) attributed the decline to two factors- a. prices for domestic alumina fell faster than imported alumina due to growing supply, making the former more attractive; b. depreciation of yuan against US dollar.

Smelter cuts which had been happening since last week if continues may pull the prices further down in the near term, industry sources said.

There have been talks of planned smelter cuts in the past month on the back of long prevailing weak domestic aluminium prices, with an estimated 600,000-700,000 mt/year of capacity expected to be reduced in the short term. But till now, only one Beijing Xinheng Group owned smelter in Qinghai province has confirmed cutting capacity.

However, these talks have not provided much traction to domestic metal prices, as the quantity is marginal compared to China’s total capacity of about 40 mtpa. But the cutbacks are likely to put domestic alumina spot prices under pressure as demand falls, and also amid the low metal prices.

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