Core Viewpoint - The alumina market is facing multiple bearish factors, leading to a weak price trend, with a focus on smelting cost support and the willingness of the smelting industry to reduce operating capacity in the future [1] Group 1: Alumina Supply and Demand - In September, China's bauxite imports reached 15.88 million tons, a year-on-year increase of 38.14%, but a month-on-month decrease of approximately 2.41 million tons, indicating a seasonal decline [1] - Cumulatively, 157 million tons of bauxite were imported in the first nine months of the year, a year-on-year increase of 32%, with Guinea accounting for 118 million tons (40.3% increase) and Australia 27.71 million tons (5.4% decrease) [1] - As of October 17, domestic bauxite port inventory was 28.69 million tons, a week-on-week increase of 653,000 tons, indicating a high supply level [1] Group 2: Alumina Production and Inventory - Domestic alumina production capacity was 112.55 million tons, with an operating capacity of 96.8 million tons, a week-on-week decrease of 1.4 million tons [1] - The weekly alumina production as of October 17 was 1.861 million tons, significantly higher than the same period last year, while electrolytic aluminum production was 852,900 tons, maintaining a supply surplus [1][3] - As of October 17, domestic alumina inventory was 4.639 million tons, with a week-on-week increase of 63,000 tons, indicating ongoing accumulation since late May [3] Group 3: Pricing and Profitability - The FOB price for Australian alumina was $323 per ton as of October 17, unchanged from late September but down $45 from late August, reflecting a weaker overseas price trend [3] - The production cost of alumina was 2,854.3 yuan per ton, with an average profit of 135.4 yuan per ton, indicating a continuous contraction in smelting profits since early August [3][6] - The expectation of further declines in alumina prices may lead to losses in high-cost regions, increasing the likelihood of voluntary production cuts in the smelting industry [3][8]

Core Viewpoint - The aluminum oxide futures market is experiencing volatility, with recent price fluctuations influenced by supply-demand dynamics and external factors such as Guinea's mining policies [3][4]. Market Supply and Demand Dynamics - The aluminum oxide futures market has seen a notable decrease in trading activity, shifting focus back to fundamental factors. In April, widespread maintenance and production cuts due to losses led to tighter spot supply. In May, changes in Guinea's mineral resource policies contributed to a price surge, with futures prices nearing 3300 yuan/ton [3]. - As the excitement around Guinea's mining policy subsides, bearish forces have emerged, causing aluminum oxide futures prices to drop back to the 2900-3000 yuan/ton range. The Guinea government's revocation of the AXIS mining license primarily affects bauxite mining and does not significantly alleviate the oversupply crisis in the ore market [3]. Inventory and Capacity Pressure - The recent decline in aluminum oxide futures prices is primarily due to the arrival of an inventory turning point. Weekly production of aluminum oxide has increased for three consecutive weeks, and the arrival of over 30,000 tons from new Indonesian projects has shifted social inventory from depletion to accumulation [4]. - With the supply side recovering significantly in June, the pressure of overcapacity has increased. Current bauxite prices in Guinea are around 75 USD/ton, allowing domestic aluminum oxide producers to maintain high profit margins at 3300 yuan/ton. If the production cuts in Guinea do not expand further, the domestic bauxite supply is expected to balance throughout the year [4].

Group 1 - The domestic futures market for non-ferrous metals showed a downward trend, with alumina futures experiencing a decline of approximately 3.03% [1] - As of April 30, the spot price of alumina in China was 2879 yuan/ton, reflecting a month-on-month decrease of 6.47% and a year-on-year decrease of 17.03% [1] - In Shandong, the spot transaction price for alumina was reported at 2875 yuan/ton, with a slight increase of 5 yuan/ton compared to the previous transaction [1] Group 2 - The supply of alumina is under pressure due to a combination of maintenance and production recovery, with a slight increase in operational capacity, but it is still insufficient to meet the demand for electrolytic aluminum [2] - The market is expected to maintain a low valuation for alumina due to ongoing oversupply concerns and macroeconomic instability [2] - Companies are advised to monitor the operational rates of domestic alumina producers and fluctuations in imported ore prices [2]