Chinese spot alumina prices rallied further on Wednesday as offers continued to rise on strong sentiment, driven by a combination of tight spot supply, prevailing transport issues, increased costs, seasonal restocking, environmental inspections, and anticipated heavy snow this winter.
The Platts China daily alumina assessment ex-works Shanxi basis stood at Yuan 2,900/mt ($421/mt) full cash terms on Wednesday, up Yuan 50/mt from Tuesday, and also up Yuan 100/mt on the week and Yuan 220/mt on the month.
On Wednesday, a south central China smelter reported buying 20,000-30,000 mt at Yuan 2,900/mt cash ex-works Shanxi basis.
"We have no choice, offers are all going up and prices will likely reach Yuan 3,000/mt soon, and we'll probably have to keep paying," a source from the south central China smelter said.
A Shanxi refiner agreed, indicating offer levels in Shanxi ranging at Yuan 2,950-3,000/mt cash currently, up from Yuan 2,900-2,950/mt.
"We are also offering Yuan 3,000/mt cash now, and we believe tradeable levels will reach that by end-December," the refiner said.
Tradeable spot alumina prices in Henan province were also indicated higher Wednesday at Yuan 2,900-2,950/mt cash, up from mostly around Yuan 2,900/mt cash previously.
A Henan refiner said he heard a trade done at Yuan 2,970/mt ex-works Henan at partial credit terms, while a South China smelter heard deals may have been concluded even higher around Yuan 3,000/mt cash. Both potential deals were unconfirmed Wednesday.
"Nothing is available below Yuan 2,900/mt now, prices are all about the same, be it in Shanxi, Henan or Guangxi ... demand is just very strong while spot supply is tight," the South China smelter said.
Another South China smelter agreed, adding that, "We've even been approached by Xinjiang smelters recently, asking if we had extra alumina to sell ... we have some, which we are now quoting Yuan 3,000/mt cash as well."
Ex-works Guangxi alumina prices were heard tradeable at Yuan 2,900-2,950/mt cash on Wednesday, up from Yuan 2,850-2,900/mt.
The front-month primary aluminum contract on the Shanghai Futures Exchange closed at Yuan 13,450 mt on Wednesday, down from Yuan 13,680/mt last week, and also from Yuan 13,960/mt a month ago.
