Increasing Imports Of Alumina By China Buyers On The Horizon As Pinch From Shanxi Shutdowns Increases

Increasing Imports Of Alumina By China Buyers On The Horizon As Pinch From Shanxi Shutdowns Increases

Facing mounting shortages of the aluminium precursor thanks to the shut-down of a pair of refineries in Shanxi, Chinese traders say the momentum to import alumina continues to mount.

According to sources who spoke with S&P Global Platts earlier this week, alumina imports may reach levels of up between 60 thousand and 160 thousand metric tons per month, with imports in April already jumping to 56,786 metric tons.

Through April, China’s monthly average intake of alumina for the year totaled 53,985 metric tons. In March the Middle Kingdom imported 27,156 metric tons, according to numbers from China’s General Administration of Customs.

Beijing has thus far shut down 2.8 million metric tons per annum of alumina-smelting capacity at Xinfa Jiaokou Feimei, plus another 400 thousand metric tons per annum at Shangxi Xiaoyi Huaqing Aluminium’s smelter over concerns of a release of red mud in the area. No official timetable has yet been announced, but insider sources say the shut down could last between two and four months.

Subsequently Antaike indicated that Xinfa Jiaokou will fulfill long-term contracts using alumina stocks already on hand. Additionally, the refinery may pull stocks from Xiaoyi Xinfa or Shandong Xinfa, both of which are sister operations under the Xinfa umbrella.

The alumina capacity shut downs come at a time when supplies are already spread thin thanks to prior cuts in the name of environmental protection. “Chinese local supplies would tighten because there is a possibility that on wider environmental concerns, supplies may be cut elsewhere or ramp up delayed,” explained an unnamed Australian refinery source to S&P Platts.

“Even without the Xinfa incident, we were seeing tighter supplies in China,” continued the source.

Bauxite imports are expected to continue at high volumes due to declining stocks in port, per the sources. Local stocks are estimated at 26 million metric tons, down by 23 percent on the week, as bauxite production has also constricted on concerns of environmental degredation.