Domestic and abroad alumina spot prices are stepping up in the first half of Year 2024
In the domestic market, affected by the explosion of Guinea's oil depot at the end of 2023, the shutdown of domestic bauxite mines in Henan and Shanxi, as well as the shutdown and reduction of alumina plants in Hebei and Shandong due to the heavy pollution weather, the market's concern about bauxite supply and the wide-scale reduction of alumina enterprises led to a rapid upward movement of alumina prices in January. After the Spring Festival to the first half of April, domestic alumina prices entered a platform period, prices fell slightly, but the overall rate of decline was not large.
From mid-April to May, domestic alumina prices entered the second stage of rapid increase driven by the collective rise in commodity prices, and then hit a record high.
In June, with the decline in futures prices, alumina spot transactions dropped significantly, and spot prices entered the platform period again.
In the first half of the year, the domestic alumina spot price was as high as RMB3,917 per ton and as low as RMB3,156 per ton, with an average price of RMB3,504 per ton, up 21.0% year-on-year.
As for the international market, the overall trend of international alumina spot price is basically the same as that of the domestic market, but the rate of price increase is weaker than that of the domestic market.
In March 2024, Rio Tinto Group's two alumina plants located in Australia, Yarwun alumina plant and Queensland alumina plant, were affected by the fire of natural gas pipeline, which resulted in the reduction of the operating capacity of about 1.2 million ton a year, and Rio Tinto issued force majeure announcements in respect of these two alumina plants in May. In addition, Alcoa shut down its Kwinana alumina plant in Australia in April, involving an operating capacity of about 1.8 million ton a year. As a result, overseas alumina supply declined, supporting the price rise.
In the first half of the year, the international spot price of alumina (FOB spot price) was as high as USD511/ton and as low as USD354/ton, with an average price of USD403/ton, up 14.3% year-on-year.
On the supply and demand side, domestic alumina supply was in shortage in the first half of 2024. On the supply side, China's alumina production capacity reached 104.35 million ton per year by the end of June 2024, but constrained by the lack of bauxite supply, as well as the impact of safety and environmental protection, domestic alumina enterprises cut production on a large scale, and the start-up rate was only 76.2% in January, although alumina enterprises made efforts to resume production driven by the sharp rise in alumina prices after that, the speed of production capacity recovery is still relatively slow. Demand side, because the domestic electrolytic aluminium industry production in the first half of 2024 as a whole remained stable, operating capacity and start rate are record high, the demand for alumina also increased accordingly. Combined the above factors, the first half of the overall domestic alumina supply shortage of 890,000 ton, the shortage of scale compared with last year has expanded.
By the end of August, the domestic bauxite supply in the short term has not recovered and it is expected to continue to be in short supply. In the meantime, Guinea rainy season has gradually begun to show the impact on imported minerals, and imported supply will remain tight in September. Bauxite prices will stay strong in short time, and alumina ore costs will also show a certain upward trend, which will continue to provide strong support for alumina prices.
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