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Australian alumina boosted by China's high domestic prices, Q4 restocking

https://www.chemnet.com   Sep 18,2014 Platts
The price of Australian alumina rose $4/mt Wednesday, taking the Platts daily assessment to $338/mt FOB, driven, sources said, by higher Chinese domestic prices and seasonal restocking in China during the fourth quarter.

The Platts ex-works Henan alumina daily price rallied Yuan 30/mt ($5/mt) Wednesday to Yuan 2,730/mt for 70:30 cash and credit payment terms, lifted by tighter domestic spot supply, and production problems at a Chalco refinery in Henan province.

A producer reported the sale Tuesday of a 30,000 mt Alcoa of Australia parcel at $340/mt FOB 10 days after documents, for shipment in mid-November.

Platts was unable to verify the deal with the buyer, nor establish if the price was immediately repeatable.


A number of Asian and western consumer, producer and trader sources said the traded price was a few dollars higher than they expected.

A western supplier said he had expected the next spot trade to reach $337/mt FOB Australia.

A western trader had anticipated the market to trade next at $336/mt, while two Chinese consumer and trader sources put the market clearing rate a shade higher at $338/mt FOB.

An Asian trader said if he had the chance he would have bid in the mid-$330s FOB Australia.

Two Chinese consumer/reseller sources put the buyers' ceiling at $357-360/mt CIF.

As a guide, the range would have suggested netted back estimates of $335-338/mt.

A third Chinese consumer/reseller placed a firm bid Wednesday at $335/mt FOB Western Australia LC at sight, for a 30,000 mt shipment within October.

The bid is valid until 5 pm Singapore time (0900 GMT) Thursday.

Meanwhile, a fourth Chinese consumer/reseller said in the past two days sellers had indicated guidance at around $340/mt FOB for November shipments.

In China, port stocks offers were pegged a shade higher than Yuan 2,700/mt, though trading activity has been thin.

Sellers were holding onto material in anticipation of further price increases, sources said.

Chalco's alumina production at its 2.4 million mt/year refinery in Henan's capital city of Zhengzhou was disrupted Wednesday, due to possible damage to its red mud dam, sources said.

Two Chalco sources said operations had been affected, but did not specify whether operations have been reduced or suspended.

The refinery was operating at a rate of 2 million mt/year before the incident, a source said.

The Platts ex-works Henan alumina assessment, at Yuan 2,730/mt, was up Yuan 130/mt week on week, and up Yuan 260/mt month on month.

Spot alumina offers in Henan rallied to Yuan 2,800-2,850/mt full cash basis following the Chalco news, compared with a previous Yuan 2,700-2,750/mt cash to partial credit terms.

Two Henan smelters who received offers at Yuan 2,800/mt Wednesday said actual trades would not be possible at such levels.

"But if anyone really needs to buy today, then they will probably have to pay more than yesterday," one Henan smelter said.

Chinese alumina prices have been rising steadily in the past week on the back of limited spot availability and strong sentiment in anticipation of seasonal restocking demand in the fourth quarter.

The front-month October aluminum contract on the Shanghai Futures Exchange rose Yuan 110/mt to Yuan 14,415/mt, compared with Yuan 14,610/mt last week.
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