Chinese alumina prices fall, supply seen rising
Tuesday, Aug 21, 2007
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HONG KONG, Aug 20 - Prices of alumina in China continued a downtrend this week due to increased production and more imports, industry sources said on Monday.
Some 1.6 million tonnes of alumina capacity was expected to come on stream in September, the sources estimated.
That would add supply in Chinese alumina sector, which already produced 55 percent more material from a year earlier to 11.1 million tonnes in the first seven months of this year.
"Alumina prices are unlikely to rebound strongly in the near term," a trade manager at an alumina refinery said.
Aluminium producer Weiqiao might also haveave extra alumina to sell on the domestic market after an accident at a facility.
Fourteen people were killed and 59 injured when molten aluminium in liquid form spilled out from its container and mixed with cold water at a foundry owned by Shandong Weiqiao Pioneering Group, Xinhua reported.
The group controls Weiqiao Aluminium and Hong Kong-listed Weiqiao Textile .
A senior executive at the group handling after-accident works was not available for comment.
The foundry was believed part of Weiqiao Aluminium's new 250,000-tonne-a-year smelter and used to make ingots using molten aluminium, industry sources said.
The accident, which blew the roof off of the workshop, smashed window panes and cracked walls, might force Weiqiao Aluminium to slow down production at the smelter.
The sources said Weiqiao Aluminium also operates another 250,000-tonne smelter. It had capacity of 4 million tonnes of alumina and used part of the output for its aluminium production.
Supply of imported alumina has also increased after imports rose by 100,000 tonnes from June to 440,000 tonnes in July.
IMPORTS RISE
A trade manager at a large smelter said prices of spot imports had fallen near prices of locally produced alumina in early July, spurring smelters to import high-grade materials.
Spot alumina was trading at 3,400 to 3,500 yuan ($448-$461) per tonne versus 3,500 to 3,600 yuan last week and 3,900 yuan last month.
Aluminum Corp of China Ltd , the country's top and the world's third-largest alumina producer, has maintained spot price at 3,900 yuan since March.
Spot imports were being indicated at about $380 per tonne for delivery to Chinese ports versus $390 in July.
But traders said world alumina prices might bounce if Hurricane Dean hampers production in Jamaica, one of the world's major suppliers of alumina and bauxite, the ore refined into alumina.
U.S. aluminium major Alcoa Inc said on Sunday it had temporarily curtailed production at its 1.4 million tonne Jamalco alumina refinery in Jamaica as a precautionary measure in advance because of Hurricane Dean. [ID:nWEN0548]
"Alumina prices should be heading down due to the fundamentals. For a rise, it can only rely on accidents," a trader at one international trading house said. ($1=7.5930 yuan)