Alumina exports from the People’s Republic of China hurtled to a yearly high in September, surpassing August’s imports by a factor of five.
Per numbers released yesterday by China’s General Administration of Customs, alumina exports last month totaled 165,839 metric tons, besting August’s export total of 29,722 metric tons and representing a year-on-year increase of over 3,400 percent.
The Middle Kingdom’s exporting of significant quantities of alumina is a significant departure from the usual, as the lion’s share of alumina is consumed domestically by Chinese smelters. However, thanks to a series of events, including a partial shutdown of operations at the world’s biggest alumina refinery in Brazil and strangling sanctions on United Company Rusal by the Trump administration, the global market has seen the usual sources dry up and prices spike. The third quarter alone saw alumina prices jump by over 30 percent, but they have since receded by 13 percent for the month to date on news of the end of the Alcoa strike and resumption of half capacity at Alunorte.
Such a landscape has created a lucrative arbitrage situation for Chinese smelters, and they have been diligently taking full advantage of the situation. CRU’s Jackie Wang told Reuters that September’s bountiful harvest came as a result of contracts signed in August, when the arbitrage was “wide open.” However, Wang indicated that the arbitrage door is closing, noting that CRU is not aware of a significant number of export contracts inked this month.
August exports fell below those of the two prior months, when shipments topped 100 thousand metric tons each month.
Per customs data, the Middle Kingdom imported 30 thousand tons of the aluminium precursor last month.