The impact of alumina development on aluminium market will squeeze industry profits

On March 29, the 5th China Commodity Industry Forum hosted by Xinhu Futures was held in Shanghai. In the afternoon colored sub-forum, Aladdin Sino-Ying Network Aluminum Research Institute President Shi Fuliang from the current market more concerned about the alumina problem, the aluminium market was analyzed.

From the current production of alumina, it can be seen that there is a steady growth trend. As of March this year, domestic alumina production capacity was 84.17 million tons, and operating capacity was 73.75 million tons. However, with the slowdown of demand growth, the growth rate of alumina production began to decline significantly from last year. Last year, China’s alumina production showed a trend turning point, with annual output of 71.61 million tons, an increase of 1.5% over the same period last year.

Looking at this year’s performance of alumina, he believes that supply tension will ease relatively, and global supply and demand fluctuate around the balance line. “The main variables affecting supply and demand this year focus on imports and exports, and the most direct correlation is the possibility of the first half recovery of the Brazilian alumina plant in Hyderu. Exports are currently expected to remain unchanged in the first quarter, but uncertainty increases in the second half of the year. He said that the supply of domestic alumina is increasing. If there is no special export situation, the supply of alumina is still under great pressure.

In terms of policy, he said that after the reform of supply side of electrolytic aluminium, the state will further introduce the regulation and control policy of alumina. At present, bauxite has become the core focus of the market. With the continuous stringent environmental protection policy, the examination and approval of mining rights continue to be strict, and the production capacity of inland alumina has expanded, and the supply and demand pattern is still tense.

In terms of price performance, alumina prices have been driven by rising costs for a long time, and in the short run by Alunorte’s 50% capacity reduction and Russian and Aluminum sanctions. As costs continue to rise, industry profits will be squeezed.