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China Alumina Prices Steady, May Test Higher on Bauxite Concerns

Chinese spot alumina prices were steady Wednesday, but may test higher in the near term as government environmental protection moves may reduce domestic bauxite supply, market sources said Wednesday.

From: platts.comDate: 2016-08-04 06:42:26Views: 467

Chinese spot alumina prices were steady Wednesday, but may test higher in the near term as government environmental protection moves may reduce domestic bauxite supply, market sources said Wednesday.

The Platts China ex-works Shanxi alumina assessment stood unchanged at Yuan 1,710/mt ($258) in full cash terms on Wednesday, but was up Yuan 20 on the week, and down Yuan 160 on the month.

Spot offers in Henan and Shanxi were indicated mostly around Yuan 1,750/mt cash on Wednesday, with no trades reported.

Alumina prices have risen over the past week on news that Henan’s Kaiman Aluminum refinery has been asked to shut down 1.1 million mt/year of alumina capacity which have not reached required environmental standards.

“Now there’s talk that all bauxite mines in Henan may also have to shut down for inspection in the near term…if that is true, then alumina prices will be further supported,” a Beijing trader said.

“We’ve also heard talk of possible bauxite mine shutdowns in Henan, but it’s not confirmed, and it’s unlikely all mines, since many have legal licences to operate and are above board. So it may just be the illegal mines or those without full licences that will be shut,” a Henan refiner said.

The halt in Henan bauxite mines operations, if it were to happen, would help support alumina prices, but the move upward might be limited, as most refiners have around three-four months of bauxite stockpiles, refiners can always purchase bauxite from neighbouring Shanxi province, sources said.

“Henan is also not a major spot alumina market. If this bauxite mine shutdown happens in Shanxi, then it will have a much bigger impact. Right now, we need to see if the shutdown of the mines actually happens at all, and, if it does, how it pans out,” the Henan refiner said.

The rebound in alumina prices was also expected to be limited as domestic alumina stockpiles remain high and in excess of demand, sources said, adding that alumina prices would garner stronger support if more refineries reduced production in the near term.

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