China: Yunnan's demand boosts alumina prices to 1-month high

According to an Alcircle report, Chinese alumina prices reached their highest level recently in over a month due to limited supply and increased demand from aluminium smelters in Yunnan province, which is located in the southwestern part of the country. This surge was witnessed on the Shanghai Futures Exchange (SHFE), specifically in the alumina futures contract introduced recently.

Refinitiv Eikon data revealed that the contract for the most-traded November expiry date, experienced a significant jump of 3.2%, reaching an all-time high of RMB 2,908/t.

According to Xinlin Chen, a consultant at Wood Mackenzie, the ongoing restart of Yunnan smelters has reignited China's demand for alumina. Some refineries in northern China have been operating at reduced capacity for months and have yet to resume full production. These developments have positively impacted China's alumina prices in the short-term.

Aluminium smelters in Yunnan have significantly increased their production in response to a recent boost in hydropower output. As power usage restrictions have been eased, these smelters now have the opportunity to expand their manufacturing capacity.

Notably, alumina, also known as aluminium oxide, is the crucial raw material used in aluminium production. This surge in production from the Yunnan region is beneficial for the aluminium industry, which relies on this versatile metal in various sectors such as transportation and packaging.

Note: This article has been published in accordance with an article exchange agreement between Alcircle and SteelMint.