China Shanxi Alumina Falls to Yuan 3,250/mt on Weak Aluminum

Chinese spot alumina prices fell further Wednesday as domestic metal prices continued to weaken.

The Platts ex-works Shanxi daily spot alumina assessment dropped Yuan 50/mt ($7.60) to Yuan 3,250/mt in cash, compared with Yuan 3,300/mt Tuesday.

The current price also reflected a decline of Yuan 150/mt on the week and Yuan 500/mt from last month.

The front-month primary aluminum contract on the Shanghai Futures Exchange closed at Yuan 14,170/mt on Wednesday, down from Yuan 14,510/mt last week and Yuan 15,975/mt a month ago.

"There's talk that spot metal has already fallen below Yuan 14,000/mt in some places now, so overall sentiment is very weak, and buyers are all staying away, or asking for close to Yuan 3,000/mt now," a Henan refiner said.

"We expect metal prices to break below Yuan 14,000/mt, and alumina can go below Yuan 3,000/mt. So we're not buying spot alumina yet. We'll wait," a Sichuan smelter said.

On Wednesday, the Changjiang spot aluminum price was Yuan 14,050/mt.

Five refiner, trader and smelter sources put current tradeable spot alumina prices at Yuan 3,200-3,300/mt ex-works Shanxi/Henan on Wednesday. Lower levels of Yuan 3,100-3,200/mt cash were indicated for ex-works Guangxi/Guizhou basis.

"Sentiment is very weak -- ingot is expected to fall further, especially with domestic metal stocks very high now, around 1.75 mil mt and expected to rise further. So alumina will also test lower," a Shanxi refiner said.

Short term expectation is that spot alumina prices will soften until second half December, when more spot demand may emerge as smelter reserves deplete and as winter restocking picks up, sources said.