Recently, there have been many negative factors in the alumina market, and the price trend has been weak. In the future, the key attention should be paid to the support of smelting costs and the willingness of the smelting industry to voluntarily reduce operating capacity.
Relevant data shows that in September this year, China's bauxite imports reached 15.88 million tons, up 38.14% year-on-year but down approximately 2.41 million tons month-on-month, presenting a seasonal downward trend. In the first nine months, cumulative imports reached 157 million tons, up 32% year-on-year. Among them, 118 million tons were imported from Guinea, an increase of 40.3% year-on-year, accounting for 75% of the total imports. Imports from Australia reached 27.712 million tons, a year-on-year decrease of 5.4%, accounting for 17.6% of the total imports.
As of October 17th, the weekly inventory of bauxite at domestic ports was 28.689 million tons, an increase of 653,000 tons compared with the previous period, reaching a high level in the same period of the past four years. The inventory of sea-floating goods was 11.9243 million tons, a decrease of 1.581 million tons compared with the previous period, slightly lower than the level of the same period last year. Overall, the domestic supply of bauxite has been abundant recently.
As of October 17th, the domestic built capacity of alumina was 112.55 million tons, and the operating capacity was 96.8 million tons, a decrease of 1.4 million tons compared with the previous period and an increase of 100,000 tons compared with the end of September. The weekly output of electrolytic aluminum can directly reflect the changes in demand for alumina. As of October 17th, the domestic weekly output of alumina was 1.861 million tons (much higher than the same period last year), and the weekly output of electrolytic aluminum was 852,900 tons. The ratio of the two was 2.18 (2.05 in the same period last year, and the standard smelting ratio was 1.93). Overall, the pattern of domestic oversupply of alumina continues.
In terms of inventory, as of October 17th, domestic alumina inventory stood at 4.639 million tons, with a weekly accumulation of 63,000 tons, compared to the accumulation of 134,000 tons at the end of September. Since the end of May, alumina has been continuously stockpiled, with a total accumulation of 845,000 tons. Looking at the individual items, the weekly accumulated inventory at the port was 29,000 tons, and there was no significant change in the inventory within the factory. The inventory of electrolytic aluminum plants increased by 11,000 tons per week, and the inventory at the platform and in transit rose by 23,000 tons. At present, the alumina smelting industry is still profitable, and there is no news of production cuts for the time being.
In terms of imports, as of October 17th, the Free on Board (FOB) price of Australian alumina at ports of shipment was 323 US dollars per ton, remaining unchanged from the end of September but dropping by 45 US dollars per ton compared to the end of August. During the same period, domestic spot prices dropped by approximately 8.26%, indicating that the overseas alumina price trend was weaker in September and import profits expanded. In combination with the shipping schedule, imported goods will arrive at ports one after another from October to November, and the domestic supply surplus pattern of alumina will continue.
From the perspective of profits in the smelting industry, as of October 3rd, the full cost of alumina production was 2,854.3 yuan per ton, and the average profit was 135.4 yuan per ton. Since the first ten days of August, the profits of smelting have continued to shrink. It is expected that smelting losses have already occurred in high-cost regions. Although there is no news of production reduction or suspension for the time being, with the further decline in the spot price of alumina, smelting losses are inevitable. At that time, the probability of high-cost regions voluntarily reducing or suspending production is relatively high.
Since the beginning of this year, the volume of registered warehouse receipts for alumina has fluctuated significantly. Before mid-April, the market price dropped significantly, the industrial hedging willingness was strong, and the volume of warehouse receipts continued to increase. From mid-April to the end of July, spot and market prices stabilized and rebounded, alumina inventories declined, spot supply was tight, and warehouse receipts continued to flow out. Since the end of July, spot prices have rebounded, smelting profits have been restored, and the industry's operating capacity has rapidly increased. Based on the expectation of overcapacity, the number of warehouse receipts has continued to rise, exerting strong pressure on the market price.
In summary, the domestic supply of bauxite is abundant, the operating capacity and weekly output of alumina remain at a high level, the profit of smelting continues to narrow, and the import channel of alumina has been opened. It is expected that alumina will arrive at the port successively in October and November. The domestic inventory of alumina continues to accumulate, and the number of registered warehouse receipts on the exchange is much higher than that of the same period last year. The domestic price of alumina is under pressure. It is expected that the price of alumina will be difficult to recover in the short term. It is recommended to pay attention to the support of smelting costs and whether the smelting industry will voluntarily reduce production after the subsequent smelting profits enter the loss range.
