Home > Chemical News

Chemical News

China spot alumina prices rangebound as market eyes new direction

http://www.chemnet.com   Aug 31,2015 Platts
China spot alumina prices closed the week rangebound Friday, as market participants continued to eye the yuan and stock market for clearer direction.

Platts China ex-works Henan spot alumina price closed the week Friday at Yuan 2,320/mt ($363/mt) for 70:30 cash and credit payment terms, unchanged from Thursday, but down Yuan 20 from a week ago and Yuan 30 on the month.

Ex-works Shanxi prices also remained at Yuan 2,250-2,300/mt cash to full credit terms, with ex-works Guangxi spot offers steady at Yuan 2,250-2,270/mt full cash basis.

The yuan devaluations and the stock markets crash earlier this week added pressure to an already weak alumina/aluminum market faced with extended low metal prices and excess smelting capacity, sources said.

Outlook remained dim despite a marginal recovery in the stock markets and the yuan on Friday, and alumina prices are still expected to test lower in the near term, sources added.

"People are still pessimistic about the yuan, so everyone is very cautious. It improved today, but it is uncertain if it can be sustained," a South China smelter said.

"The yuan and stocks are still volatile. We must wait for some stability," a Beijing trader said.

For now, refiners are unwilling to lower offers further as they wait for clearer direction, while smelters are in no rush to buy as refiners' reserves are high and fresh smelter cutbacks may emerge, sources said.

China Nonferrous Metals Industry Association said in a report on its website early this week that China was expected to shut down about 2.4 million mt/year of aluminum smelting capacity by end-2015. The CNIA report came after an industry meeting with major Chinese smelters on August 21, 2015.

Most market participants expressed doubt over the reported fresh smelter cuts, though some believed already planned cutbacks in the first half of the year that remained unfulfilled may be realized in the fourth quarter of 2015.

On Friday, the front month September aluminum contract on the Shanghai Futures Exchange closed at Yuan 11,890/mt, down from Yuan 11,955/mt last week, and from Yuan 12,245/mt a month ago.

The dollar was trading at Yuan 6.3986 Friday, compared with Yuan 6.4085 last Thursday and Yuan 6.1181 on August 6.
 Print  |    add to Favorites  |    Close