Rising costs have pushed alumina prices up modestly

Different from the hot electrolytic aluminum market, since 2021, the domestic spot price of alumina has risen after a sense, generally showing a narrow range of shocks.At the beginning of the epidemic to transport restrictions, domestic alumina prices rose slightly.However, after the Spring Festival holiday, the impact of the epidemic subsided, the trend of alumina prices reversed, and the following two months have maintained a weak shock.Since April, the price of electrolytic aluminum has continued to hit the high level, driving the price of alumina to rise;In May, the upward channel of alumina price has been opened. At present, the mainstream transaction price of more than 10,000 tons in the north has risen to 2480-2500 yuan/ton. The price range has widened and the center of gravity has moved upward.On June 4, the average spot price of domestic alumina reached 2,460 yuan/ton, up 136 yuan/ton compared with the beginning of the year. In May, the monthly increase reached 90 yuan/ton, which was also the main period of price rise. 

From the cost point of view, the recent alumina cost increased significantly, the rapid rise of thermal coal price and the rise of caustic soda price have pushed up the production cost of domestic alumina, the weighted average cost of domestic alumina in May is estimated to reach 2413 yuan/ton, an increase of 79 yuan/ton.Rising alumina costs and high alumina prices have pushed up alumina prices.

As for the future market, from the perspective of the operating rate, the alumina capacity recovered includes: Shanxi Jiaokou Feimei Aluminum Co., Ltd. resumed production in May after two years of suspension, and the product is expected to be put on the market in June.New capacity to come on stream in the near future includes;Guangxi Longzhou Xinxiang Ecological Aluminum Co., Ltd. 1 million tons per year has been put into trial production at the end of May;Guizhou Guang Aluminum Alumina Co., Ltd. has a completed production capacity of 600,000 tons, and the first phase of the second section is under construction with a production capacity of 300,000 tons per year, which is scheduled to be put into production in June.June - July alumina market supply will increase.

In May, domestic electrolytic aluminum projects entered the period of intensive production and resumption of production. Henan Hengkang Aluminum Co., Ltd., with a capacity of 240,000 tons, and Gansu Zhonrui Aluminum Co., Ltd., with a capacity of 100,000 tons, both started resumption of production in May.Guangxi Baiguo Aluminum Co., Ltd. put into production 70,000 tons/year in May.However, at the same time, the production capacity of electrolytic aluminum in Yunnan has been stopped due to power rationing, and the production schedule of new production capacity has also been delayed.Overall, the production capacity of electrolytic aluminum production is greater than the resumed production capacity, aluminum oxide demand is expected to narrow.

Taken together, the current rising cost of alumina and high aluminium prices have pushed up alumina prices.Although the price difference between domestic and foreign alumina is suitable for import, the high sea freight and shipping date limit the import demand, and the import volume of alumina did not rise significantly.Basic balance of supply and demand in the face of the basic price support, alumina prices are expected to maintain a small upward trend in the short term.