Asia Pacific alumina participants divided over rapid price rise

The price of alumina closed steady Thursday in the Asia Pacific region at $419.50/mt FOB Australia, unchanged from a day ago.

Platts' Australian price benchmark has climbed $13.50/mt on the week and $17.50/mt in the past month.

On Thursday a producer reported the sale of a 30,000 mt parcel late Wednesday at $420/mt FOB Australia cash against documents, for shipment in the second-half of June.

The deal -- which Platts was unable to immediately verify -- was in addition to a 35,000 mt trade done late Tuesday between two producers at the equivalent of $419.50/mt FOB Australia with 30 days credit, for shipment between mid- and the second-half of June.

On Thursday the buying producer said it was in talks to acquire a June cargo at $415/mt FOB Brazil. The company said it thought the Pacific region was fetching a premium of about $4/mt to the Atlantic market. "Due to problems at Gladstone, the Pacific has become tighter and more in demand in the last couple of weeks."

Market participants are divided over the rapid pace of the price rise. "We consider this price [$419.50/mt] to be a good $10 above the market," a producer said Thursday. The company was believed to have been a bidder for the cargo.

The buyer of the $419.50/mt trade said Wednesday that "there was nearby tightness and not a lot of sellers. There was stronger buying interest than selling interest."

The seller of the $419.50/mt cargo said it had received about 10 bids. Recent supply and shipment issues in Australia and Brazil relating to Queensland Alumina and Alunorte, were known to have created new demand for June especially among producers and traders.

At least one consumer was known to have considered reducing its term-contract tonnage to help ease pressure on its supplier.

Platts' China domestic alumina price benchmark closed Thursday at Yuan 2,730/mt ($419/mt) ex-works Henan, unchanged from Wednesday, and up Yuan 20/mt from a week ago.

Refiners in Henan offered cargoes at Yuan 2,750/mt. Smelters said they were looking around Yuan 2,720/mt. Market participants said demand for spot cargoes was expected to pick up over April, for restocking and aided by a recent recovery in domestic ingot prices.

The front-month May aluminium contract on the Shanghai Futures Exchange closed at Yuan 16,640/mt Thursday, down marginally from Yuan 16,670/mt Wednesday, but up from Yuan 16,550/mt on Tuesday.