Chinese alumina prices rose to their highest in more than a month on supply tightness amid improving demand from aluminium smelters in the southwestern Yunnan province, analysts and traders said on Thursday.
Alumina spot prices hit 2,842 yuan ($395.89) per metric ton on Wednesday, the highest since June 9, data by SMM provided on Refinitiv Eikon showed.
The newly launched alumina futures contract on the Shanghai Futures Exchange jumped as much as 3.2% on Thursday, to a record 2,908 yuan per metric ton for the most-traded November expiry date SAOX3, Refinitiv Eikon data showed.
“The ongoing restart of Yunnan smelters brings back China’s alumina demand. Some refineries in northern China have lowered the utilisation rates for months and have not resumed their full operation yet,” said Wood Mackenzie consultant Xinlin Chen.
“These are positive news to drive up China alumina prices in the short term.”
Alumina, or aluminium oxide, is the raw material used in making aluminium, a metal applied widely in the transport and packaging industries.
Aluminium smelters in Yunnan have ramped up production in recent weeks as curbs on power usage are relaxed after a recent recovery in hydropower output, analysts said.
A China-based trader said a jump in alumina futures on SHFE is likely to catch up with a rally on the spot market, which is caused by a short term tightness in the market amid faster-than-expected smelting restarts in Yunnan.
Source: Hellenic Shipping News
