Reason Analysis on A Sharp Rise in Alumina Prices in September

In Mid-August, domestic alumina prices had a huge lift, and as of October 17, it has risen as high as 43.82%. SMM thinks the main reasons that domestic alumina had a sharp rise in prices include declining imports, transportation and other factors.

A, The rising raw material cost: Affected by environmental protection and supply-side structural reform, the prices of caustic soda and coal are sharply increased, so the alumina raw material costs have risen recently.

B, The imports slumping and short supply: The demand for alumina is increasing with the production of electrolytic aluminum, but domestic alumina imports fall, causing domestic alumina market in short supply.

C, An accident causes the shut-up of two alumina plants: Alumina prices got close to the enterprises’ cost line in early August, however in Shanxi and Henan, two alumina plants have to stop the production because of an accident.

D, The tense transportation: The tense railway transportation makes alumina transportation hampered, and the recent trucks loading limit also increases the transportation cost of alumina.

E, Alumina inventory transfer: In early August, alumina prices were at the stage of low, which made alumina inventory transfer. Most of alumina were sold to electrolytic aluminum enterprises, so the alumina inventory eased. And traders took delivery of goods, which makes market supply significantly tightened.

F, Alumina plants are reluctant to sell out obviously: After a sharp rise of alumina prices in September, the sellers' market has been established. Many alumina enterprises express that they are in a low inventory state, so they are reluctant to sell out obviously. In this case, alumina plants raise the alumina prices.