China alumina exports surge to seven-year high as surplus widens

me-metals: China’s growing glut of alumina pushed exports to their second-highest level ever in March, with shipments expected to remain elevated for several more months.

According to me-metals cited from mining.com, Overseas sales of the raw material for smelting aluminum more than doubled from a year earlier to 300,000 tons, according to the latest Chinese customs data. That figure was exceeded only in October 2018, when a refinery curtailment in Brazil and US sanctions on United Co. Rusal International squeezed the global market.

China’s alumina market has been on a roller-coaster of late. Prices nearly doubled last year before crashing as a wave of new capacity was brought online, forcing the industry to seek foreign buyers.

Unlike other Chinese metals, including steel and aluminum, that have drawn scrutiny from trading partners after the country’s exports swamped world markets, alumina sales are contained to only a few main buyers.

Russia remains the biggest destination as its aluminum producers continue to grapple with a shortage of feedstock since the invasion of Ukraine. The country accounted for 48% of China’s exports last month. Rusal, its biggest aluminum maker, signed a landmark deal in 2023 with a Chinese plant specifically to plug the gap in supply.

Indonesia, which hosts Chinese smelters, and the United Arab Emirates took 19% and 23%, respectively.

Traders shipped extra alumina overseas after a plunge in domestic prices widened the window for arbitrage, said Zhang Meng, an analyst with consultancy AZ China Ltd. Volumes are likely to remain elevated at between 150,000 and 200,000 tons in coming months, he said.

The Chinese government, meanwhile, is trying to tackle the surplus by curbing excessive investment, including a ban on new plants in heavily polluted areas. The directive mirrors similar guidance on raw materials given to China’s copper smelters, another industry contending with chronic overcapacity.

The China Nonferrous Metals Industry Association last week criticized elements of the alumina sector’s blind expansion. The industry body said China has about 15 million tons of capacity under construction, and more than 20 million tons at the planning stage. Those expansions would significantly add to China’s existing 107 million tons of annual capacity.

source: mining.com

China Aluminum raw materials