Metal Products News
- Alumina prices rise on demand, output
Date: 20-Dec-2007 Sources: (Shenzhen Daily)
DOMESTIC alumina prices have risen 10 percent this month and 30 percent since late October because of strong demand and production disruption at refineries.
Aluminum Corp. of China Ltd. (Chalco), which is the largest alumina producer in the country, is expected to raise its spot alumina price by 8 to 13 percent late this month, which could boost its profits.
Chalco's spot alumina prices have stayed at 3,800 yuan (US$514) a ton since late November when it raised the price by 8.5 percent.
Major non-Chalco refineries, including China's second and third-largest alumina producers - Weiqiao Aluminum and Chiping Xinfa Huayu Alumina - were offering spot alumina at about 4,300 yuan a ton versus 3,900 yuan early this month, a Weiqiao official said. The price was about 3,300 yuan in late October.
'Our sales have (been) stable after the price hikes,'he said.
Alumina is the main material for primary aluminum production for which China is the world's top producer.
Analysts have predicted aluminum output will rise to about 12.6 million tons this year and 16 million tons next year due to expanded capacity, against 9.2 million tons last year.
About 2 tons of alumina are needed for 1 ton of primary aluminum.
Aluminum smelters in the north were building alumina stocks on fears that transports would slow in the winter and that could affect their production, smelter officials said.
Other smelters were also raising purchases from local alumina refineries and preferred to put their imports in bonded warehouses because the government might cancel a 3 percent tariff on imports in January as part of its policy to encourage imports of raw materials.
Alumina already arrived in Chinese ports was trading at 4,400 yuan a ton, traders said. Spot imports were indicating at around US$470 to Chinese ports versus US$375 in mid-September.
Alumina output in November unexpectedly fell 3 percent from October to 1.7 million tons due to repairs at Weiqiao and Chiping, smelter officials said.
Output at Chalco's Zhengzhou plant in Henan has fallen since October when a 300,000-ton-a-year facility started a gradual shutdown for upgrading.
The project would be completed in October next year, which would reduce the plant's production to 2 million tons next year from 2.35 million tons this year, a Chalco source said.
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