Chinese spot alumina prices rallied further Thursday after reaching nine-year highs on the back of bauxite supply concerns, limited spot supply, anticipated refinery cutbacks for winter, increased demand ahead of the October 1-8 National Day holidays and strong domestic metal prices.
Platts China ex-works Shanxi daily spot alumina assessment stood at Yuan 3,290/mt ($503/mt) cash Thursday, up Yuan 60/mt from Wednesday and Yuan 290/mt from a week ago. The current price is also up 33% from a month ago.
The bid-ask spread stood at Yuan 3,250-3,300/mt cash Thursday, up from Yuan 3,200-3,250/mt Wednesday. Most sources, however, said actual tradeable levels were likely closer to Yuan 3,300/mt for Shanxi and Henan spot alumina, as offers remained high.
Market talk continued Thursday that a spot trade had been done ex-works Henan Wednesday at Yuan 3,300/mt cash, but the trade remained unconfirmed. A Henan refiner reported selling spot at Yuan 3,300/mt at 20-30% credit Wednesday, but it was not certain the two trades were the same.
Refiners' offers stayed mostly at Yuan 3,300-3,500/mt cash Thursday, but sellers are expected to be eying Yuan 3,700/mt by October, having previously aimed for Yuan 3,500/mt.
"That may just be possible now; even trades in Guangxi have just been heard done at Yuan 3,230/mt cash," a South China smelter said.
A Shanghai trader said: "Nothing can be ruled out now, the market is very messy, offers are very high ... as long as metal prices don't fall back, smelters will pay."
On Wednesday, Shandong Hongqiao reported selling 10,000-20,000 mt spot at Yuan 3,350/mt cash to a Chinese trader, for end-September to early October delivery, and was offering at Yuan 3,400/mt.
"It's a sellers' market now; if smelters want to buy, they have to pay, or they will have to shut down or cut production ... and no-one wants to cut when prices are strong now," a Henan refiner said.
The front-month aluminum contract on the Shanghai Futures Exchange closed at Yuan 16,410/mt Thursday, up from Yuan 15,990/mt a week ago and Yuan 15,625/mt a month ago.
