According to www.platts.com, Chinese spot alumina prices fell further Thursday as market sentiment stayed weak due to growing domestic stockpiles, slow demand and talk this week that a major refiner was willing to sell way below current market levels, several sources said.
Market talk was rife Thursday that Aluminum Corp of China (Chalco) sold 30,000 mt of spot alumina ex-works Henan basis to smelter Qinghai Huanghe Xinye at Yuan 1,790/mt ($268/mt) cash.
Chalco sources situated in Henan couldn't be gone after remark Thursday, yet a source from Chalco's exchanging arm said its residential offers stayed unfaltering, without revealing any figures. A Qinghai Huanghe Xinye source said he didn't know about any settled exchange this week, however did not deny conceivable continuous talks and declined further comment.
"Spot alumina prices have fallen further as a result ... we can sell around Yuan 1,840-1,850/mt cash today, but there's probably not many willing buyers around," a Shanxi refiner said. "If the Chalco deal is true and confirmed, then the market will crash."
A Henan refiner source agreed: "We've also heard of the possible Chalco deal, and though not confirmed, that has weakened sentiment further."
On Thursday, Platts ex-works Shanxi alumina daily assessment stood at Yuan 1,840/mt in full cash terms, down Yuan 30/mt from Tuesday, and down Yuan 40/mt from last week. The current price was also down Yuan 130/mt from a month ago. There was no assessment Wednesday as Singapore was closed for Hari Raya Puasa.
Tradeable spot prices in Henan were also heard lower Thursday at around Yuan 1,850/mt cash, from Yuan 1,880-1,900/mt previously. Ex-works Guangxi prices, however, were steady at Yuan 1,800-1,850/mt cash.
The current support level for spot alumina was seen at Yuan 1,750/mt on Thursday for Shanxi and Henan, down from Yuan 1,800/mt earlier this week, sources said. But if the Chalco trade at Yuan 1,790/mt is confirmed, prices may hit Yuan 1,700/mt or even break below that level in the near term, sources said.
Refinery cutbacks are "very likely" to happen again should prices fall below Yuan 1,700/mt, several refiner sources said.
"That might be just what the market needs. There were too many refinery restarts earlier, and not enough smelter restarts. So a correction in both prices and supply may be a good thing," the Henan refiner source said.