China Spot Alumina Firms Further by Yuan 30/mt to Yuan 2,680/mt

China’s spot alumina prices continued to make gains this week as sentiment stayed strong on the back of high aluminum prices and potential bauxite supply concerns in Shanxi province.

The China ex-works Shanxi daily spot alumina assessment stood at Yuan 2,680/mt ($402/mt) cash on Tuesday, up Yuan 30/mt from Monday and up Yuan 210/mt on the week. The current price also reflected an increase of Yuan 180/mt from a month ago.

Refiners are mostly holding back offers now in anticipation of further price increases, or quoting higher levels at Yuan 2,700-2,750/mt cash, multiple market participants said.

Tradeable spot levels were put at Yuan 2,650-2,700/mt cash on Monday, sellers and buyers agreed.

“We are not buying spot yet, but if we needed to, we will have to pay the current levels. Since ingot prices are strong now, we can consider it,” a South China smelter said.

A Henan smelter agreed, adding that: “There’s more buy queries now but sellers are holding back, so there’s a slight panic.”

In the near term, spot alumina prices are expected to continue testing higher, likely reaching Yuan 2,700/mt or even breaking above that level, sources said.

“There’s talk that some sellers are aiming to push domestic prices up to Yuan 3,000/mt … everyone is confident prices will rise further,” a Chinese trader said.

“People also think domestic metal prices can break above Yuan 17,000/mt this year, so alumina may test higher,” another trader said.

On Tuesday, the front-month aluminum contract on the Shanghai Futures Exchange closed at Yuan 16,280/mt, up from Yuan 15,600/mt a week ago, and also from Yuan 14,345/mt last month.