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Asia alumina: Australia drifts; China edges up another Yuan 10/mt

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Asia alumina: Australia drifts; China edges up another Yuan 10/mt

Singapore — The Platts Australian alumina daily assessment remained steady at $250/mt FOB Thursday amid thin trade, as the market awaited fresh direction in the wake of higher Chinese metal and alumina prices this week, and a new spot sell tender issued by India's Nalco late Wednesday.

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Nalco has offered a 30,000-mt spot cargo for May 18-22 loading from Visakhapatnam on a FOB basis. The tender will close on April 22, with bids to remain valid until April 25.

Two Chinese resellers, two Chinese traders and two western traders have said this week they have Pacific cargoes available for May and June loading. Most, however, were not offering currently as they anticipated higher prices. A third western trader said Thursday he had also been approached by a producer this week on a possible May shipment, but no details were provided.

Separately, re-negotiations remained ongoing for India Hindalco's May shipment of 30,000 mt, that closed in a sale tender last week, a company source had said Wednesday.

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But despite the seeming availability of cargoes currently, market sentiment stayed strong for alumina in the near term as Chinese domestic metal and alumina prices improved, and the yuan currency rate firmed against the US dollar, which may result in renewed import interest, sources said.

If Chinese metal prices can stay above Yuan 11,800/mt, and either stabilize or test higher, alumina buyers would likely pay $260-$262/mt CIF basis in the near term, maybe even as soon as next week, multiple Chinese resellers, traders and smelters agreed.

Domestic aluminum prices had breached Yuan 11,900/mt ($1,834) Wednesday on the Shanghai Futures Exchange, and closed in to Yuan 12,000/mt in the spot market. Prices slipped slightly Thursday, but market confidence remained as current prices were comparatively higher from those seen earlier this year.

The front-month aluminum contract on SHFE closed at Yuan 11,865/mt Thursday, down from Yuan 11,915/mt Wednesday, but up from Yuan 11,740/mt a week ago. The Changjiang spot aluminum price stood at Yuan 11,830-11,870/mt on Thursday, down from Yuan 11,950-11,990/mt on Wednesday.

Although the short-term outlook for alumina and metal prices was bullish, upward movement remained limited on potential Chinese refinery and smelter restarts. Several smelter sources said they were eyeing restarts currently, but would only come back online if prices could stabilize around Yuan 12,000/mt or above for one to two months.

On Thursday, the Platts ex-works Shanxi alumina spot assessment edged up another Yuan 10/mt to Yuan 1,960/mt full cash terms. It had gained Yuan 10/mt earlier on Tuesday this week. The current price reflected an increase of Yuan 20/mt on the week, and was up Yuan 30/mt from last month.

"Alumina offers and prices have all gone up again, by Yuan 5-10/mt, mainly due to the higher ingot prices yesterday [Wednesday]," a Henan smelter said.

A northeast China smelter and a trader who buys from Shanxi also put current tradable prices at Yuan 1,950-1,960/mt cash on Thursday.

The rise in alumina prices was also expected to be limited in the near term on potential refinery restarts, sources said.

Several refiners have said they were also gearing up for restarts now, with plans to come online should prices reach and stabilize around Yuan 2,000/mt or above.

On Thursday, the Platts Handysize freight rate was assessed at $9.10/mt, unchanged from Wednesday, for a 30,000-mt shipment from Western Australia to Lianyungang.

--Yuencheng Mok, yuencheng.mok@platts.com
--Edited by Irene Tang, irene.tang@platts.com