Chinese spot alumina prices rise on smelter demand

Reuters reported that Chinese aluminium smelters are bringing idle and new capacity on stream and driving up spot prices of alumina. Rising domestic alumina prices were encouraging smelters to look for imports, which rose 24% on the year to June after reaching a 15 month high in April. As per report, Aluminum Corporation of China Limited raised its spot alumina prices by 4.3% to CNY 2,400 per tonne over the weekend. A smelter official said that "Smelters are interested in imports. Local prices are expected to rise further." Other refineries in China were selling spot alumina at around CNY 2,350 per tonne to CNY 2,400 per tonne up from CNY 2,200 per tonne CNY 2,300 per tonne in July and below CNY 2,000 in late March. A trader with an international trading house said that large Chinese aluminium smelters were keen to book forward imports to lock in with current prices, though prices for spot imports have risen about 10% from last month. He said that "Large smelters want insurance. Chinese prices are now around CNY 2,400. But next month, the prices could be changed." Traders and smelter officials said that spot alumina was being offered around USD 300 per tonne to Chinese ports up from about USD 270 last month. They estimated that Chinese smelters have restarted nearly 3 million tonnes of idle and new capacity since March and another 1 million tonnes of capacity is expected to start production before November boosting demand for alumina. Chalco has reopened some of its 960,000 tonnes of aluminium capacity that was closed in the Q4 of l2008 and may restart the rest if aluminium prices remain firm. A company source said that "We need to see for half a month or one month if prices will stay stable." Official data showed that Previo Spot aluminium prices have risen nearly 10% over the past month to about CNY 15,000 per tonne recently in China supported by strong prices on the London Metal Exchange. MAL3 China produced 1.05 million tonnes of the metal in June up 5.5% on the month but down 5.7% from a year earlier. (Sourced from Reuters)