The reasons for the rise in alumina prices can be mainly attributed to the following points:
Supply-side issues
Restricted domestic ore mining: Due to environmental protection and other factors, the mining of domestic bauxite is restricted, resulting in a tight supply of domestic bauxite.
Tight supply of imported ore: Guinea, the main source of bauxite imports, is affected by uncertain factors such as weather, policy, and shipping, and the overall supply of ore is tight. In addition, the supply of bauxite in Australia and other regions is also affected by various factors, such as frequent accidents in alumina plants, which further aggravates the tight supply of global bauxite.
Increased demand
Growth in demand for electrolytic aluminum: The demand in the electrolytic aluminum market is increasing, and the speed of new production and resumption of production are beyond expectations. China's electrolytic aluminum operating capacity has reached a relatively high level, and the operating rate of electrolytic aluminum enterprises is also high.
Downstream aluminum plants have a rigid demand for inventory replenishment: Near the end of the year, holiday factors and winter inventory replenishment have caused downstream aluminum plants to implement rigid demand inventory replenishment, and the problem of spot circulation cannot be alleviated, so the purchase price of alumina continues to rise.
Rising costs
Rising import costs: The sharp rise in overseas alumina prices has caused the import costs of alumina to rise to a high level, and the domestic import window has continued to close, exacerbating the tight supply situation.
Increased production costs: Due to the limited room for increasing domestic bauxite mining, the tight supply of raw materials may become the norm, resulting in higher alumina production costs.
Market speculation
A relevant person in charge of the China Nonferrous Metals Industry Association pointed out that there are irrational factors in the price trend of alumina, and excessive capital speculation is obvious. This has also driven the rise in alumina prices to a certain extent.
In summary, the reasons for the rise in alumina prices are multifaceted, including supply-side problems, increased demand, rising costs, and market speculation. These factors work together to make alumina prices show a trend of continuous rise.
