Asia Alumina: Australia Ticks Up, China Firmer by Yuan 30/mt

The Australian alumina daily assessment ticked up 50 cents/mt to $230.50/mt FOB on higher domestic prices in China. But the increase in the Australian price was modest as high stocks in China meant there was no urgent need for imports. There have been signs of unplaced Australian material for shipment in October.

Guidance from mainstream buyers was at $242/mt CIF Lianyungang/China main port. One Chinese smelter was considered able to pay more than its peers, but no trade was reported Monday. The fluctuating, weak yuan also appeared to deter Chinese buyers.

Recent selling interest was seen at around $246/mt. S&P Global Platts assessed the Handysize freight rate at $13.85/mt on Monday for a 30,000 mt shipment in H2 October from Western Australia to Lianyungang.

Last week, smelters in India and the Middle East turned down the chance to buy three October shipments from Western Australia.

Producer and consumers sources in China did not rule out a possible downward correction in domestic prices when transportation bottlenecks in Shanxi province ease in the next couple of weeks. Shanxi is a coal production hub and a surge in outbound deliveries led to transportation delays, pushing up prices in Shanxi and other regions including Henan.

Refinery stocks have been building in Shanxi, however. Sources said that they were expecting smelting growth to support alumina prices.

RISES YUAN 30/MT IN SHANXI

The Platts ex-works Shanxi alumina spot assessment was firmer Monday at Yuan 1,960/mt ($293) full cash terms, up Yuan 30/mt from September 14, as the market returned from an extended holiday weekend. The current price also reflected an increase of Yuan 40/mt week on week, and Yuan 190/mt month on month.

Short-term market sentiment stayed strong despite softer domestic metal prices as alumina demand was expected to see support from smelter restarts and ramp-up in capacity, sources said.

Refiners offered mostly around Yuan 2,000/mt cash ex-works Shanxi on Monday, up from Yuan 1,980/mt cash last week, with tradeable levels put at Yuan 1,950-1,970/mt cash, up from Yuan 1,920-1,950/mt previously, market participants said.

"We just sold 10,000 mt spot to a trader at Yuan 1,980/mt at 50% credit terms, so cash should be at least Yuan 1,960/mt. There's talk of prices reaching Yuan 2,000/mt and above in the near term, but it's not there," a Shanxi refiner said.

A Northwest China smelter also put the tradeable level at around Yuan 1,960/mt cash on Monday, while a Henan smelter said that prices could reach Yuan 2,000-2,100/mt cash by October. A South China smelter also indicated a continued uptrend in the near term, but said that any rise would be limited by soft ingot prices.

On Monday, the front-month aluminum contract on the Shanghai Futures Exchange closed at Yuan 12,400/mt, down from Yuan 12,540/mt last week, and also from Yuan 12,740/mt a month ago.

Meanwhile, ex-works Henan alumina offers were indicated higher Monday at Yuan 2,000-2,050/mt cash to partial credit terms, up from Yuan 1,980-2,000/mt cash. The bid-ask spread in Guangxi continued at Yuan 1,850-1,900/mt cash, though a source close to a refiner said he would not sell below Yuan 1,900/mt now as the outlook remained strong.