Asia Alumina: Australia Price Slips $1/mt to $235/mt FOB

The Australian alumina daily assessment slipped $1/mt to $235/mt FOB on Tuesday, as buyers remained scarce amid a generally pessimistic market outlook.

"There's no one buying at the moment, as everyone is expecting the market to go down further, probably breaking below $230/mt soon," an Asian consumer source said.

"The Chinese are not buying as domestic prices are falling, and the Middle East, India and Malaysia have all bought recently. We don't see the Chinese buying in the next three months at least," he added.

A producer source agreed, adding that Chinese refiner stockpiles were very high, which was the main factor pressurizing domestic alumina prices down, "so Chinese alumina prices can still test lower."

A potential Chinese reseller said he had an Australian cargo available for October loading, but was not offering at the moment as there was no interest with "buyers expecting prices to fall to around $230/mt."

A second potential Chinese reseller said it was a buyer's market now, and everyone was cautious as general expectation was that prices would break below $230/mt in the near term, and might even reach around $220/mt.

"Even $230/mt is too high for the Chinese ... that's about Yuan 1,960/mt, compared to domestic levels of Yuan 1,700/mt and below," he said.

Two Western traders saw the current market clearing level at around $235/mt FOB on Tuesday, but agreed prices would remain in a downtrend in the near term on lack of demand.

In China, the Platts ex-works Shanxi alumina price softened Tuesday to Yuan 1,690/mt ($253/mt) in full cash terms, down Yuan 10 from Monday, and a week ago, and down Yuan 210/mt month on month.

Participants continued to await results of a domestic buy tender for a clearer market direction, and most sources said expected it would generally pressure prices down.

A Chinese trader was said to have issued a tender seeking 100,000 mt of spot alumina. The tender is due to close at the end of the week, sources said. If realized, the tender is likely to bring domestic alumina prices down to around Yuan 1,650/mt cash or lower, the sources added.

"Offers are still holding in Shanxi at Yuan 1,700/mt cash, but no one is buying. So tradeable levels will have be be lower," a Shanxi refiner said.

"There is talk that prices can fall further still, probably hitting bottom around Yuan 1,600/mt, as that's where cash costs for Shanxi refiners are estimated to be at," a Beijing trader said.

On Tuesday, the front-month aluminum contract on the Shanghai Futures Exchange closed at Yuan 12,290/mt, down from Yuan 12,400/mt a week ago and also lower than Yuan 12,565/mt seen a month ago.