Alumina review 2024: Multiple bullish factors resonated, spot alumina prices rose by over 80%

At the end of 2023, large-scale production cuts and suspensions occurred in bauxite mines in Shanxi. In Q1 2024, domestic ore production in Shanxi and Henan did not resume, and some alumina refineries in southwest China also faced insufficient bauxite supply. The tightness in bauxite supply intensified, and temporary procurement of imported ore faced significant challenges. Coupled with the impact of winter environmental protection policies in northern China, alumina producers were forced to cut production, resulting in an overall tight supply of alumina. Spot prices rose significantly compared to Q4 2023. The average SMM alumina index price in Q1 2024 was RMB 3,328 per tonne, up RMB 326 per tonne from RMB 3,002 per tonne in Q4 2023, expanding alumina profit margins.

From late February to March, driven by the expanded profit margins, some alumina refineries supplemented raw materials by procuring imported bauxite, leading to an increase in operating rates. Spot prices in northern China saw a slight correction, while in southern China, due to the resumption of aluminium capacity, increased demand provided stronger support for spot prices, which remained stable overall.