China alumina prices steep due to deficit in the market

Since import market for alumina is tight and alumina supply in China is now in a deficit, this situation will allow prices of alumina to hold firm in September, an SMM forecast says.

Aluminium production is in check and there are fewer orders from most large aluminium smelters in China. Despite this, Alumina market has now turned into a seller’s market and the alumina supply tightness is not expected to ease in the near term.

Currently there is a narrow gap between domestic and imported alumina prices, as the domestic alumina price is gaining faster. So, Chinese buyers prefer to import alumina for the smelters. But, as the alumina supply in the overseas market is tight, this will tighten import volumes to China.

According to China customs data, China imported 219,900 tonnes of alumina in July, up 36.8% from June, but down 59.66% from a year ago. Australia still claims 65.6% of the total alumina imports.

SMM data showed that the average alumina price in domestic four major markets advanced further to 1,940 yuan per tonne in mid-September. SMM forecasted China’s alumina output to be at 4.9 million tonnes in September due to resumed production, but, due to tight import, alumina prices would continue to remain steep.

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