On Wednesday, July 16th, one of the "Metal Trade Review" series reports by S&P Global Commodity Insights indicated that the global alumina market is expected to face pressure in the third quarter of 2025, mainly due to the continuous increase in new refinery projects in Indonesia, which has led to a continuous growth in supply.
However, in the context of widespread global trade uncertainties, market sentiment is mixed. Market participants are closely monitoring the arbitrage trends in China and the supply of bauxite in Guinea to obtain a clearer direction.
Karen Norton, chief aluminium analyst at S&P Global Commodity Insights, said: "In the short term, we expect the market to remain sensitive to possible fluctuations in bauxite trade and any delays in ongoing projects. Looking ahead, it is essential to recognize that these projections largely depend on the success of alumina projects and expansion projects, as well as downstream strategies in countries such as Indonesia and Guinea.
Platts assessed that on July 16th, the benchmark FOB price of alumina in Australia was $368 per ton. In the second quarter, the FOB price of Australian alumina remained within the range of $329 to $375 per ton, while the offshore premium of Brazilian Atlantic alumina hovered around $20 to $25 per ton.
Platts assessed the price of alumina in China at 3,200 yuan per ton (the ex-factory price in Shanxi), and the price fluctuated within the range of 2,850 to 3,310 yuan per ton in the second quarter.
Indonesian refinery project
In the second quarter, the price of alumina mostly fluctuated within a range, and market participants watched the progress of the new refinery project in Indonesia with caution. Among them are the PT Borneo Alumindo Prima Refinery, the Phase III expansion project of Bintan Alumina Indonesia, and the Mempawah refinery of PT Borneo Alumina Indonesia.
Market participants said that as the third quarter began, the price pressure brought about by the expectation of increased supply for these projects remained strong.
A source familiar with the operation of the factory said that the PT Borneo Alumindo Prima refinery with an annual production capacity of 1 million tons has obtained the export sales license in the second quarter and has begun commercial sales, while the operating capacity of the factory is gradually increasing. The source said that whether full-load operation can be achieved depends on the current inventory level.
The third-phase expansion project of Bintan has an annual production capacity of 1 million tons and was put into operation in July. Sources said that production is expected to stabilize in August.
Market sources said that the initial production capacity of the refinery is expected to be 500,000 tons per year and will gradually increase to full capacity operation. The fourth phase is expected to come on stream in the fourth quarter.
The Mempawah refinery with an annual production capacity of 1 million tons is operated by PT Borneo Alumina Indonesia, which is jointly owned by PT Indonesia Asahan Aluminium (Inalum) and PT Antam, with the former holding 60% of the shares. The latter holds 40%.
A source familiar with the factory said that production is currently underway and not for sale, mainly because Inalum, as a shareholder, will mainly purchase the alumina produced by the Mempawah refinery.
Although additional supply from Indonesia is expected to depress the price of alumina in the future. But market participants say that the ultimate impact will largely depend on the actual supply in the spot market at that time.
Bauxite supply in Guinea
Despite the fact that some bauxite mines faced operational challenges after the Guinean government announced the revocation of 51 mining licenses involving multiple minerals in May, China's bauxite imports were strong in April and May, totaling 38.19 million tons, driven by strong demand from refinery plants and supply from Guinea.
Data released by the General Administration of Customs shows that Guinea maintained its position as China's largest bauxite supplier in April and May, with exports reaching 13.2 million tons in May and 16.7 million tons in April. Guinea has the world's largest proven reserves of bauxite.
Sources said that as Guinea enters the peak period of rainfall, bauxite mining and export activities may be disrupted, leading to a decline in production and logistics challenges. Although the potential increase in bauxite prices may support the price of alumina, a price decline may limit its rise.
Sources stressed that there remains uncertainty in bauxite supply as some mines may resume production after temporary cuts. This might put pressure on bauxite prices, thereby creating room for a potential decline in the price of alumina.
