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Alumina Spot Prices to Fall Further

Special Price Outlook Report

Executive Summary

1. Alumina prices have plummeted to a 22-month low of $338 per mton on multiple bearish factors. Australia alumina spot prices have continued to decline on a well-supplied market, falling production costs, and lower LME aluminum prices.

More details in full report.

2. Indeed, the Brazilian Federal Court lifted the alumina production embargo against Alunorte. Since Alunorte restart was confirmed on May 20th, Australia alumina spot prices have fallen by 10%. According to Hydro, Alunorte will reach 75%-80% of capacity within two months. The refinery was running at half capacity since March 2018 after it was ordered by Brazilian environmental authorities to curtail production on concerns of a leak from bauxite residue deposits. Alunorte can produce around 6.4 million mton of alumina per year.

More details in full report.

3. Alumina spot prices are expected to fall to as low as $270 per mton at some point in the next 12 months as the market experiences a growing surplus. With the confirmed restart of the Alunorte refinery in Brazil and production expansions in China and the Middle East, the world's alumina market is expected to switch to a surplus of 2.8 million mton in 2019, from a deficit of 0.4 in 2018. In fact, market sources are already reporting unplaced alumina cargoes and buyers staying on the sidelines waiting for lower prices.

More details in full report.