Summary of Aluminum Oxide Market Conference Call Industry Overview - The aluminum oxide market is experiencing a divergence between high inventory levels and tight spot supply, primarily due to futures arbitrage locking in a significant amount of circulating resources, delaying the manifestation of excess supply [1][2] - The overseas market has shifted to a surplus state, with Middle Eastern electrolytic aluminum production reduced due to supply risks from the Strait blockade, leading to an expected monthly import volume exceeding 200,000 tons starting from April-May 2026 [1][3] - New domestic production capacity in 2026 is concentrated in the second quarter, with approximately 4 million tons expected to be released, which will likely weaken prices in the third quarter and trigger the exit of high-cost production capacity [1][9] Key Market Dynamics - The average fully loaded cost in the industry is around 2,650-2,700 RMB/ton, with future costs expected to stabilize between 2,700-2,800 RMB/ton as ore costs decline [1][8] - To break the current deadlock, operational capacity needs to drop below 92 million tons; the current level of 93 million tons maintains a tight balance, and the inventory inflection point has not yet been reached [1][7] Supply and Demand Factors - The core fluctuation factors in the aluminum oxide market for 2026 revolve around supply and demand dynamics, with recent strong domestic spot prices attributed to unexpected production cuts in the Wenfeng region, causing operational capacity to drop to 93 million tons [2][5] - Despite continuous accumulation of social inventory, the market perceives tightness due to the introduction of aluminum oxide futures tools, which have significantly activated market liquidity through hedging and arbitrage activities [2][6] International Market Impact - The overseas aluminum oxide market is currently in a surplus state, with Indonesia having about 1 million tons of production increase, while recent production cuts in Mozambique, Bahrain, and Qatar have further exacerbated the surplus [3][4] - The surplus overseas aluminum oxide resources are likely to flow into the Chinese market, with significant increases in port inventories reflecting this trend [4][11] Inventory and Corporate Behavior - Inventory distribution and corporate behavior across the aluminum oxide supply chain show divergence, with production companies actively selling to avoid future inventory and sales pressure, while electrolytic aluminum plants maintain high raw material inventories due to favorable profit margins [5][6] - Trade merchants face challenges in inventory digestion, primarily relying on futures warehouse receipts for delivery, but are hindered by saturated warehouse capacities [6][10] Future Outlook - The key to breaking the current inventory accumulation deadlock lies in larger-scale production cuts, requiring operational capacity to be reduced below 92 million tons to trigger an inventory inflection point [7][8] - The expected release of new production capacity in the second quarter of 2026 will lead to sustained market surplus, potentially resulting in price declines and high-cost capacity reductions in the third quarter [9][10] Cost and Pricing Trends - The average cost of the aluminum oxide industry is projected to remain around 2,650 RMB/ton, with a potential increase in production costs due to rising ore prices, which are currently around 65-70 USD/ton [8][25] - The relationship between aluminum oxide and electrolytic aluminum pricing is complex, with the former currently in a surplus state while the latter benefits from positive consumption expectations and overseas production cuts [24][25] Regulatory and Policy Considerations - Guinea's bauxite quota system is expected to be implemented, primarily aimed at resource integration, with limited impact on existing stock but potential restrictions on new supply [9][10] - Domestic policies encouraging the extraction of lithium and potassium from red mud have seen limited implementation due to high costs and market conditions [21][22] Conclusion - The aluminum oxide market is characterized by a complex interplay of supply and demand dynamics, regulatory changes, and cost pressures, with significant implications for pricing and corporate strategies moving forward. The anticipated production capacity increases and ongoing international market developments will play crucial roles in shaping the market landscape in 2026 and beyond [1][9][24]

Report's Industry Investment Rating - Not provided in the report Core Viewpoints - After the rainy season in Guinea, shipments are gradually recovering, and the resumption of production at the AXIS mine is expected to cause the ore price to decline with fluctuations. Attention should be paid to the support at the import cost level of Guinea's ore. The over - capacity pattern in the alumina smelting sector is difficult to change in the short term, and the inventory accumulation trend continues. The National Development and Reform Commission has proposed to prevent blind investment and disorderly construction in alumina and copper smelting, increasing the market's expectation of the implementation of supply contraction policies in the future. However, a sustained rebound still faces three dilemmas: an oversupplied smelting sector, a downward - shifting cost support, and the pressure of expiring warehouse receipts for delivery. In the short term, it is recommended to wait and see, as the cost - effectiveness of chasing long positions is not high. One can wait for opportunities to arrange short positions in the near - term contracts on rallies. The reference operating range for the domestic main contract AO2605 is 2600 - 2900 yuan/ton, and attention should be focused on supply - side policies, Guinea's ore policies, and the Federal Reserve's monetary policy [12][13] Summary by Directory 1. Weekly Assessment - **Futures Price**: As of 3 pm on January 16, the alumina index fell 3% to 2745 yuan/ton this week, and the open interest decreased by 74,000 lots to 703,000 lots. The alumina futures price retreated from its high this week, the spot price was sluggish, and the futures price rebound was still difficult to sustain. The Shandong spot price was reported at 2565 yuan/ton, at a discount of 52 yuan/ton to the 02 contract. The spread between the first - and third - month contracts closed at - 37 yuan/ton [11][24] - **Spot Price**: This week, the alumina spot prices in various regions continued to decline. The spot prices in Guangxi, Guizhou, Henan, Shandong, Shanxi, and Xinjiang decreased by 25 yuan/ton, 25 yuan/ton, 25 yuan/ton, 30 yuan/ton, 35 yuan/ton, and 40 yuan/ton respectively. With the continuous inventory accumulation trend, the spot prices in most regions remained under pressure [11][21] - **Inventory**: During the week, the total social inventory of alumina increased by 75,000 tons to 5.393 million tons. Among them, the inventory in electrolytic aluminum plants increased by 28,000 tons, the inventory in alumina plants remained unchanged, the in - transit inventory increased by 55,000 tons, and the port inventory decreased by 8,000 tons. The total warehouse receipts of alumina on the Shanghai Futures Exchange increased by 17,200 tons to 176,800 tons during the week; the inventory in the delivery warehouse was 217,100 tons, an increase of 21,100 tons from last week [11][70][72] 2. Spot and Futures Prices - **Spot Price**: The alumina spot prices in various regions continued to decline, with different decreases in different regions due to the continuous inventory accumulation [21] - **Futures Price and Basis**: The alumina futures price retreated from its high, and was difficult to sustain a rebound. The Shandong spot price had a discount to the 02 contract, and the spread between the first - and third - month contracts was - 37 yuan/ton as of January 16 [11][24] - **Bauxite Price**: The bauxite prices in various regions remained unchanged this week. The CIF price of Guinea's bauxite decreased by 1.5 dollars/ton to 63 dollars/ton, and that of Australia's bauxite decreased by 2 dollars/ton to 60 dollars/ton. After the rainy season in Guinea, the ore shipments increased, and the resumption of the AXIS mine exacerbated the bauxite oversupply pattern. With the high port inventory, the ore price is expected to decline with fluctuations, and attention should be paid to the support at 60 dollars/ton for the CIF price of Guinea's bauxite [29] 3. Supply Side - **Bauxite Production**: In December 2025, China's bauxite production was 4.94 million tons, a year - on - year decrease of 3.1% and a month - on - month increase of 5.16%. The total production in the first twelve months of 2025 was 60.15 million tons, a year - on - year increase of 1.14% [33] - **Bauxite Import**: In November 2025, China imported 15.11 million tons of bauxite, a year - on - year increase of 22.34% and a month - on - month increase of 9.76%. The total import in the first eleven months of 2025 was 186.51 million tons, a year - on - year increase of 29.44%. Among them, the import of Guinea's bauxite in November 2025 was 10.71 million tons, a year - on - year increase of 33.84% and a month - on - month increase of 19%, while the import of Australia's bauxite was 3.41 million tons, a year - on - year decrease of 2.73% and a month - on - month decrease of 10.78% [35][37][39] - **Bauxite Inventory**: In December 2025, China's bauxite inventory increased by 2.97 million tons to 56.26 million tons, remaining at a high level in the past five years. The inventory in Shanxi decreased by 41,000 tons, and that in Henan increased by 22,000 tons, with the main increase coming from Shandong [42] - **Alumina Production**: In December 2025, China's alumina production was 8 million tons, a year - on - year increase of 8.75% and a month - on - month increase of 2.07%. The total production in the first twelve months of 2025 was 90.65 million tons, a year - on - year increase of 10.06%. As of January 16, 2026, the weekly alumina production was 1.853 million tons, a slight increase of 2,000 tons from last week [44][45] - **Alumina Factory Profit**: The alumina spot price declined, putting pressure on the profit of alumina factories. According to the alumina spot price on January 16, the production profit in Guangxi could reach 120 yuan/ton. The profits in Shandong using Australian and Guinea's ores were 90 yuan/ton and 25 yuan/ton respectively, approaching the loss situation. Factories in inland areas using overseas ores in Shanxi and Henan had losses of 130 yuan/ton and 20 yuan/ton respectively [48] - **Alumina Import and Export**: In November 2025, the net alumina import was 64,400 tons. As of January 16, the FOB price of Australian alumina decreased by 3 dollars/ton to 305 dollars/ton, and the import profit and loss was - 83 yuan/ton, with the import window closed [50][52] - **Overseas Alumina Production**: In December 2025, the overseas alumina production was 5.51 million tons, a year - on - year increase of 5.66% and a month - on - month increase of 4.23%. The total production in the first twelve months of 2025 was 62.71 million tons, a year - on - year increase of 3.61% [54] 4. Demand Side - **Electrolytic Aluminum Production**: In December 2025, China's electrolytic aluminum production was 3.83 million tons, a year - on - year increase of 3.05% and a month - on - month increase of 4.02%. The total production in the first twelve months of 2025 was 44.38 million tons, a year - on - year increase of 2.71% [59] - **Electrolytic Aluminum Operation and Start - up**: In December 2025, the operating capacity of electrolytic aluminum was 44.69 million tons, a month - on - month increase of 50,000 tons. In November, the start - up rate of electrolytic aluminum decreased by 0.46% to 96.76% [62] 5. Supply - Demand Balance - The report provides an alumina balance sheet for 2026, showing the supply - demand differences, total demand, total supply, net exports, export and import volumes, alumina consumption by electrolytic aluminum, electrolytic aluminum production, operating capacity of electrolytic aluminum, alumina production, and operating capacity of alumina in different months and the cumulative data [65] 6. Inventory - **Social Inventory**: The total social inventory of alumina increased by 75,000 tons to 5.393 million tons during the week, with different changes in different types of inventory [70] - **Futures Inventory**: The total warehouse receipts of alumina on the Shanghai Futures Exchange increased by 17,200 tons to 176,800 tons during the week, and the inventory in the delivery warehouse was 217,100 tons, an increase of 21,100 tons from last week [72]

氧化铝行业分析及展望 20251210 摘要 2026 年中国氧化铝市场预计过剩 400-500 万吨，总平衡产能约为 9,100-9,200 万吨，但实际运行产能高达 9,600 万吨，下游电解铝厂库 存高企加剧供需压力，若不减产，每月过剩量约 35 万吨。 预计 2026 年 1 月起氧化铝减产将逐步兑现，部分企业可能战略性减少 40-200 万吨产能，降低开工率以缓解库存压力，长单比例下降也为减 产提供空间，1-2 月或逐步释放减产生量。 2026 年全球铝土矿供应总体充裕，中国依赖几内亚矿源，印尼、印度、 越南等地使用本地矿石，互不冲突。几内亚明年增量预计达 8,000- 10,000 吨，总体过剩至少 5,000-6,000 吨，确保市场供应充足。 铝市场核心矛盾在于新疆到期仓单转现货销售，对现货市场造成压力， 导致氧化铝价格下跌。聚生仓库成交活跃，而成通和中江仓库仓单难以 成交，盘面定价未直接反映成本估值。 短期内关注 12 月底银联盟长单价格谈判，若定价低于 70 美元/吨将压 低矿石价格至 65 美元左右，影响盘面估值区间至 2,400-2,600 元。关 注 1 月份长单转现货带来的流动性释 ...

1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints of the Report - The fundamentals of the alumina market are dominated by bearish factors, and the weak trend is expected to continue. Domestic imported ore supply is expected to increase, which may put pressure on ore prices and lead to a potential decline in the cost support for alumina. The supply side has a high level of operating capacity with only minor disruptions due to environmental protection, while the demand side is relatively rigid, and inventory continues to accumulate, indicating an expected surplus in the market. Attention should be paid to news of production cuts on the supply side [2][6] 3. Summary by Relevant Sections Transaction Data - The alumina futures (active) price decreased from 2793 yuan/ton on October 31, 2025, to 2783 yuan/ton on November 7, 2025, a drop of 10 yuan/ton. The domestic alumina spot price fell from 2906 yuan/ton to 2873 yuan/ton, a decrease of 33 yuan/ton. The spot premium increased from 118 yuan/ton to 138 yuan/ton, an increase of 20 yuan/ton. The Australian alumina FOB price rose from 318 US dollars/ton to 320 US dollars/ton, an increase of 2 US dollars/ton. The import profit and loss decreased from 274.73 yuan/ton to 225.88 yuan/ton, a decrease of 48.9 yuan/ton. The exchange warehouse inventory increased by 16,487 tons to 253,654 tons, while the exchange factory warehouse inventory remained at 0 tons. The prices of domestic bauxite in various regions and imported Guinea bauxite CIF remained stable [3] Market Review - The main alumina futures contract fell 0.36% last week, closing at 2783 yuan/ton. The national weighted average price in the spot market was reported at 2873 yuan/ton on Friday, a decrease of 33 yuan/ton from the previous week. Bauxite prices remained stable due to a stalemate between supply shortages and downstream price - pressing. The start of operations of Guinea's NIMBAMININGCOMPANYS.A. may increase the supply of imported bauxite in the Chinese market. The alumina supply decreased slightly as a Hebei alumina enterprise's two roasting furnaces were under maintenance due to environmental protection. As of November 6, the total alumina production capacity in China was 114.8 million tons, the operating capacity was 96.3 million tons, and the operating rate was 83.89%. The demand for alumina was stable as electrolytic aluminum enterprises operated steadily, but some downstream enterprises were hesitant to purchase and mainly executed long - term contracts. The alumina futures warehouse receipt inventory increased by 33,000 tons to 254,000 tons last Friday, while the factory warehouse inventory remained at 0 tons [4] Market Outlook - On the ore side, the start of shipments by Guinea's NIMBAMININGCOMPANYS.A. and the end of the rainy season in Guinea are expected to increase the surplus of bauxite in China. On the supply side, the operating capacity decreased by 400,000 tons to 96.3 million tons last week due to the maintenance of two roasting furnaces in a Hebei alumina enterprise. On the consumption side, the operating capacity of the electrolytic aluminum industry remained stable, and enterprises mainly executed long - term contracts with low willingness to purchase spot goods. The warehouse receipt inventory increased by 33,000 tons to 254,000 tons, and the factory warehouse inventory remained at 0 tons. Overall, the expected increase in domestic imported ore supply may put pressure on ore prices and lead to a decline in the cost support for alumina. The supply side has a high operating capacity with only minor environmental - related maintenance, and the consumption side is rigid, with inventory continuing to accumulate and an expected market surplus. The alumina market is expected to remain weak [2][6] Industry News - The Shanghai Futures Exchange adjusted the trading margin ratio and daily price limit for alumina futures contracts starting from the settlement on November 7, 2025. The daily price limit was adjusted to 7%, the hedging position trading margin ratio to 8%, and the general position trading margin ratio to 9%. The "Xingxian Yangjiagou Bauxite Joint Trial Operation Plan" was approved and filed, with a production capacity of 450,000 tons/year for the second system and a six - month joint trial operation period. Guinea's ELITE MINING company resumed bauxite shipments in mid - October 2025 after the rainy - season maintenance [7] Related Charts - The report includes charts showing the price trends of alumina futures, alumina spot, alumina spot premium, alumina inter - month spread, domestic and imported bauxite prices, caustic soda prices, thermal coal prices, alumina cost - profit, and alumina exchange inventory [9][12][14][15][17][20][22][25]

Group 1: Report's Core View - The current market is repeating the logic from March to May: oversupply drives down spot prices, leading to enterprise production cuts, spot shortages, and price increases that will drive a complete reversal in the market. However, the production cut-off line is uncertain. Currently, the cost is lower than in the first half of the year, and factories are still profitable, so there are no production cuts. Alumina production capacity will continue to drive output growth, and the oversupply will continue to expand [4]. Group 2: Domestic Alumina Balance Sheet - **Total Supply**: Ranges from 676.94 to 765.21 million tons from January to August 2025, with fluctuations [4]. - **Total Production**: Varies from 693.50 to 773.82 million tons during the same period, showing an overall upward trend [4]. - **Imports**: Fluctuate between 1.07 and 12.59 million tons, with an expected increase in the next two months but still maintaining a net export status [4][12]. - **Exports**: Range from 17.10 to 29.67 million tons, with relatively stable export volumes [4]. - **Total Consumption**: Ranges from 642.87 to 722.77 million tons, showing a steady growth trend [4]. - **Excess Quantity**: Fluctuates from -11.02 to 51.52 million tons, indicating periods of oversupply and shortage [4]. - **Year-on-Year Production Growth**: Ranges from -0.10% to 12.85%, with significant growth in some months [4]. - **Year-on-Year Consumption Growth**: Ranges from 0.19% to 3.80%, showing relatively stable consumption growth [4]. Group 3: Spot Market - **Domestic Spot Prices**: Continue to decline. As of Monday this week, the average prices in Shanxi, Henan, Shandong, and Guizhou are 2907, 2920, 2858, and 3133 yuan/ton respectively, with varying degrees of decline [12]. - **Overseas Spot Prices**: Slightly increased during the National Day holiday and then declined in sync with the domestic market. As of Monday this week, the FOB price in Western Australia is 323 US dollars/ton, with a week-on-week decrease of 2 US dollars/ton [12]. - **Import Profit and Loss**: As of last Friday, the import profit and loss of alumina is 76.35 yuan/ton, remaining profitable since early September [12]. Group 4: Futures Market - **Futures Price Trends**: The price of the main alumina futures contract first rose and then fell this week. It opened at 2898 yuan/ton last Monday and closed at 2820 yuan/ton this Monday, with a week-on-week decrease of 2.79% [15]. - **Futures Market Structure**: The current C structure of the futures market is stable [15]. Group 5: Cost - **Imported Bauxite Prices**: The average CIF price of imported Guinea bauxite is 73 US dollars/ton, with a week-on-week decrease of 0.5 US dollars/ton. The average CIF price of imported Australian bauxite is 70 US dollars/ton, remaining unchanged [20]. - **Regional Costs**: The fully taxed costs in various regions are estimated to be around 2700 - 3000 yuan/ton, lower than in the first half of the year [20]. Group 6: Supply Side - **Weekly Production**: As of last Friday, the weekly production of alumina is 186.3 million tons, with a week-on-week increase of 0.3 million tons or 0.16% [30]. - **Operating Capacity**: As of last Friday, the operating capacity of alumina reaches 9855 million tons, remaining unchanged from the previous week and hitting a record high [30]. - **New Investment Projects**: There are no new alumina investment projects this year [30]. Group 7: Inventory - **Total Inventory**: As of last Friday, the total alumina inventory (including factory, in-transit, raw material, and port inventories) is 457.6 million tons, with a week-on-week increase of 3.9 million tons [36]. - **Inventory Changes**: The factory inventories of alumina and raw material inventories of electrolytic aluminum plants decreased by about 1 million tons during the National Day holiday due to inventory adjustments [36].

Summary of the Aluminum Oxide Industry Conference Call Industry Overview - The aluminum oxide industry has transitioned from oversupply to a tighter supply situation due to production cuts by companies such as Shanxi Aokeda, Senze Aluminum, and Xinfeng from late March to early May, leading to a decrease in operating levels from 93.6 million tons to 86.5 million tons [1][5][12]. Key Points and Arguments - **Production Cost Increases**: The production costs of aluminum oxide have been rising, primarily due to fluctuations in ore structure costs. Domestic ore supply tightness has led to increased reliance on imported ore, with prices rising from 1,460 RMB to nearly 2,000 RMB [1][6]. - **Guinea Bauxite Price Impact**: The price of bauxite from Guinea has decreased to 70 USD/ton, which has lowered domestic production costs for aluminum oxide to around 2,700 RMB in Shandong and 2,900 RMB in Shanxi. However, the long transportation cycle of 40 days complicates the timing of using high and low-priced ores [1][7][8]. - **Price Fluctuations**: Aluminum oxide prices have fluctuated significantly, dropping from a high of 5,850 RMB/ton to a low of 2,850 RMB/ton. This volatility is attributed to high operating rates, previous high-profit margins, and expectations of new production capacity releases [3][12]. - **Production Cuts**: When aluminum oxide prices fell to 2,850 RMB/ton, companies faced losses of 500 RMB/ton, prompting widespread production cuts across the industry [1][10]. - **Future Supply and Demand**: The outlook for the aluminum oxide market in 2025 is not optimistic due to significant new production capacity coming online, such as the projects from Nong'an and Guotou Beihai. If the industry stabilizes around 70 USD, spot prices are expected to range between 2,900 and 3,000 RMB [3][26][27]. Additional Important Insights - **Impact of Guinea's Government Actions**: The Guinea government has nationalized unexploited mines, affecting companies like Shunda and potentially tightening global ore supply. While domestic reserves are currently sufficient, prolonged issues could impact prices significantly [3][21][22]. - **Production Recovery and Market Dynamics**: There are rumors of production recovery, but these lack logical support. The overall market price has only seen a slight increase, indicating that if production resumes, prices may revert to previous levels [11][17]. - **Non-Metallurgical Demand**: There has been a significant increase in non-metallurgical demand for aluminum oxide, which has contributed to strong purchasing activity in recent months [16]. - **Transportation Challenges**: The transportation route from Guinea to China is lengthy and complex, taking over 40 days, which affects the timing and pricing of ore availability [8]. - **Cost Structure**: The overall industry cost structure is under pressure, with cash costs and full costs differing by approximately 150 to 200 RMB due to depreciation and financial costs [34][35]. Conclusion The aluminum oxide industry is currently facing a complex landscape characterized by fluctuating prices, rising production costs, and significant changes in supply dynamics due to both domestic and international factors. The anticipated new production capacities and government actions in Guinea will play crucial roles in shaping the market's future.