Alumina prices surge then retreat as market sentiment turns cautious

Securities Times reporter Zhao Liqing

On April 7, China’s benchmark aluminum oxide futures contract 2605 once again weakened. During the daytime session, it closed down nearly 2.9%, with the low reaching 2,673 yuan/ton. Compared with the high of 3,136 yuan/ton on March 19, the price has corrected by nearly 15%.

In the spot market, after a round of modest gains in March 2026 for China’s aluminum oxide market, recent activity has also shown signs of a run-up followed by a pullback. According to monitoring by Zhichuang Information, the national average aluminum oxide spot price last week was 2,774.08 yuan/ton, up 22.02 yuan/ton from the previous period, a gain of 0.8%. However, the rate of increase narrowed. As of April 2, the daily average price was 2,775.35 yuan/ton, up 8.65 yuan/ton from March 26, a gain of 0.31%, with clear weakening in upward momentum.

Data from Shanghai Steelhome also showed that in March, the weighted average monthly price of aluminum oxide was 2,714 yuan/ton, up 82 yuan/ton from the prior month, representing a month-on-month increase of 3.12%. But after entering April, as the basis narrowed,期现商（futures-spot traders） increased their selling/export activity, and low-priced spot supply flowed out gradually. Downstream bidding and procurement prices also saw a modest pullback.

Xu Haibin, an analyst covering aluminum oxide at Zhichuang Information Fubao, said that last week spot prices first rose slightly and then stabilized, with generally average deal sentiment. As futures prices fell, spot prices rose and then moved toward stability; spot prices diverged somewhat from futures. Downstream end users and traders reduced their purchasing enthusiasm, and overall demand weakened.

“In early March, with new capacity that had not yet been released and reduced capacity that had not been restored, supply and demand for domestic aluminum oxide remained in a tight balance. Spot supplies available for trading were relatively tight, so traders and downstream plants increased their inquiry and purchasing enthusiasm, encouraging holders to hold firm on prices and sell reluctantly. Entering late March, spot transactions showed a differentiated trend. Some downstream aluminum plants had a just-needed restocking demand, but most aluminum plants had sufficient raw material inventory, and their willingness to purchase at bargain prices was stronger.” said Lu Junjie, an analyst at Shanghai Steelhome.

Lu Junjie believes there are two main reasons why aluminum oxide prices rose moderately in March: first, at the beginning of the month, some aluminum oxide plants increased the frequency of maintenance. Meanwhile, newly added capacity in southern regions had not yet been released. In the short term, spot supply circulation was relatively tight, and on top of that, rising oil prices drove freight costs higher, supporting the resilience of spot bid prices. Second, in parts of the north and south, some transaction prices were in a premium position (traded above benchmark). The reason was concern that rising oil prices would raise costs, as well as policy-side restrictions on bauxite supply—especially rumors that Guinea has tightened rules on bauxite supply—which led the market to worry that a future shortage of ore supply would push up aluminum oxide costs. But recently, aluminum oxide futures prices have fallen sharply, and spot prices have turned toward stability after rising. As the basis narrowed, futures-spot traders increased their selling initiative, and low-priced sources flowed out gradually. It is expected that newly added capacity in Guangxi will be released in mid-to-late April, and supply-demand mismatches will intensify, creating disagreement in the market about the direction of prices. In addition, as overseas primary aluminum production cuts expand, reduced overseas demand will lead to an increase in domestic import volumes; it is expected that imported cargoes in mid-April will arrive at port in sequence.

Regarding the recent price pullback, Xu Haibin analyzed that on one hand, regional spot supplies are relatively tight and imported bauxite prices are rising, strengthening expectations of higher bottom-end costs. On the other hand, new capacity is gradually being loaded and undergoing trial production, and the supply of imported aluminum oxide becomes more abundant. Ongoing oversupply pressure still exists, which further increases the market’s wait-and-see sentiment. “We expect that this week aluminum oxide spot prices may mainly remain stable, with a price range of 2,720 yuan/ton to 2,840 yuan/ton.”

In interviews, analysts said that the current aluminum oxide market is in a sensitive period of transition from tight balance toward supply-demand loosening. Factors such as maintenance and production cuts and tight spot supply that previously drove prices higher are gradually fading, while factors such as new capacity release, increased imports, and inventory accumulation are exerting downward pressure on prices. With both bullish and bearish factors intertwined, in the short term aluminum oxide prices may maintain a narrow-range consolidation trend.