The price of alumina products has risen rapidly

Recently, the prices of alumina, aluminum hydroxide, and electrolytic aluminum have skyrocketed. According to SMM statistics, alumina increased by 6.46% in the first half of the year, while the monthly increase was 12.58% from 2021.7.21-2021.8.27, and from 2021.8.30 to 2021.9.9, the 10-day increase reached 10.04%.

The main reason for the price increase

1.Increase in cost

Since April this year, due to environmental inspections, safety inspections, mine rectification and other reasons, China’s domestic ore production restricted prices have gradually increased and the current prices of raw materials such as coal and caustic soda remain high, resulting in high costs of alumina and aluminum hydroxide. This is especially true in northern China, so the price of aluminum products in the north has gradually increased since July.

2.Guinea’s coup d’etat affects the supply of bauxite

The sudden military coup in Guinea, the military government announced the abolition of the constitution, the dissolution of the government, and the closure of land borders, which affected the global supply of bauxite.
Guinea’s bauxite reserves account for one-third of the world. As an important source of China’s bauxite, the news immediately stimulated domestic aluminum prices and the prices of various aluminum products rose sharply.

3.Reduced production due to carbon peaking and carbon neutral policies

Under this policy, high-pollution and high-emission projects are gradually withdrawn from the market, and manufacturers have reduced production in order to “reach the standard.” It is reported that the three alumina plants in Guangxi, China, responded to the production reduction policy and reduced the load, involving a production capacity of 3 million tons per year. At the same time, as the heating season in northern China is approaching, the supply side will also limit production, which will further promote the upward price of alumina and aluminum hydroxide.

4.The price of electrolytic aluminum hits a new high, giving alumina room to rise

The current price of China’s electrolytic aluminum has been as high as about 22,000 yuan/ton due to the concerns of narrow supply Situation.

5.High ocean freight and rising prices of imported aluminum products

In mid-July, Alcoa’s Alumar alumina plant (with an annual production capacity of 3.5 million tons) cut production by one-third due to technical problems. Superimposed on August 23, a fire in Jamaica’s Jamalco alumina plant with an annual production capacity of 1 million tons resulted in the suspension of production. In the short-term, no alumina plant can estimate the time to resume production, which translates into a monthly impact (31 days) of 187,000 tons. The narrowing of the overseas supply side and the high sea freight rate have stimulated overseas buyers’ willingness to purchase, and the price has risen accordingly. The current Australian alumina FOB transaction price has reached US$381.1/ton, an increase of nearly US$60/ton from the previous period. The rise in overseas transaction prices further drove the upward price of alumina in China.

Combining various factors, the stocking cycle of aluminum products will be prolonged, and a large-scale price increase will also be ushered in at the same time. Affected by this, the ex-factory prices of China’s alumina ceramic products have been raised, the validity period of the quotation has also been greatly shortened, and the lead time has also been much longer than normal.