Recent trend of alumina – caustic soda

In the first battle of 2025, alumina is the first to bear the brunt, experiencing consecutive trading days of decline, with the price center falling from 4800 yuan/ton to yesterday’s closing of 3809 yuan/ton. The previous rise was mainly due to the continuous escalation of fundamental tool contradictions and the driving force of financial strength. The recent loosening is due to:

1. Guinea’s aluminum ore supply has returned to normal, and alumina has experienced a rapid decline. Although its impact is limited, this news has stimulated bearish sentiment. It should be noted that the shortage of bauxite supply and the problem of limiting the release of alumina production capacity have been the focus of bullish speculation on alumina since 2024, and this contradiction has almost disappeared in recent market trends;

2. Since December, the continuous decline in overseas alumina prices has been an important reason for the turning point in domestic alumina futures and current prices. Coupled with the high cost pressure of electrolytic aluminum in China, aluminum plants find it difficult to accept high priced alumina, resulting in a significant drop in the average spot price;

3. Recently, a certain alumina plant in Shanxi resumed production, with a production capacity of 1 million tons. The overall production capacity operation rate has fluctuated and rebounded, and the supply has slightly increased. In the context of increasing supply margin, stable domestic demand, and narrowing export window, the social inventory of alumina has reached a turning point, and the tight supply-demand pattern is improving positively.

While alumina is heading south, caustic soda is experiencing the opposite trend, continuing the upward trend from the beginning of the year to the end of 2024, closing at 3194 yuan/ton yesterday. Core driver: The large-scale production of alumina is concentrated in the first half of the year, while the production of caustic soda is more concentrated in the second half of the year, and the production of caustic soda is often delayed due to energy consumption limitations, resulting in a low probability of overproduction. In the long run, after the comprehensive profit recovery, the previously reduced burden enterprises have already increased their burden. If no new equipment is put into operation ahead of schedule, the supply of caustic soda will lack elasticity. The production and stocking of alumina are being realized, and it is necessary to pay attention to the pace and intensity of stocking. Before the loss and production reduction of alumina, caustic soda is still being given more attention.