Fubao News
The recent typhoon and news of the Xinfa Xinjiang smelter shutdown have curbed domestic aluminium supply in the short-term, consequently buoying prices. Typhoon Lekima has caused floods in Zouping, Shandong, forcing Weiqiao to suspend 1.05 mtpy of primary aluminum capacity. In addition, Xinjiang Xinfa smelter has shutdown 500 ktpy primary aluminium capacity due to a liquid aluminum spill. Mainstream aluminium ingot transaction prices were RMB 14,340~14,440/t at Shanghai warehouses this Tuesday, an increase of RMB 140/t on Monday.
With domestic alumina prices sitting at low levels, several high-cost alumina refineries in northern China are in loss, with some intending to halt operations in a bid to prop prices. According to SMM, domestic alumina prices rebounded slightly to RMB 2,450/t on 19th August. Looking forward, domestic alumina prices are unlikely to fall further, consequently propping aluminium prices in the short-term.
