China's smelters cut alumina purchase as aluminium falls

A fall in aluminium prices in the international market is discouraging Chinese smelters from buying spot alumina due to expectations that prices of the raw material will follow suit, trading and smelter sources said on Tuesday.
They said Chinese smelters' reduced demand was likely to put a brake on the latest price recovery of alumina, the key raw material for aluminium production.
Sources said overseas suppliers were not willing to lower their requirements because the availability of spot alumina to China had declined due to delayed and cancelled shipments from Jamaica, China's second largest supplier.
"The two sides are in opposition and are not giving up," one trader said, referring to Chinese smelters and overseas suppliers.
Tens of thousands tonnes of Jamaican alumina intended to supply China have been cancelled following damages at refineries and ports by Hurricane Ivan in mid-September, sources said.
Cancelled shipments were forcing some Chinese smelters to seek extra spot alumina but the fall in aluminium prices was keeping them from buying now, the sources added.
They said a few major overseas suppliers affected by Jamaica's supply disruptions had not offered spot alumina to China in the past few weeks.
Swiss-based commodity trading house Glencore International, a major alumina supplier to China, has lifted force majeure on its alumina shipments from Jamaica, a company spokeswoman said.
Glencore declared force majeure, releasing companies from liability in the event of an unforeseen catastrophe, on September 15.
Sources in China estimated that less than 900,000 tonnes of imported alumina were sitting at Chinese ports, nearly 20 percent less than two months ago.
Traders said duty unpaid spot imported alumina had changed hands at $455-$462 a tonne to China ports in the past few days, against about $455 ten days ago and $420 in late September. They saw offers staying at $460-$470.
Prices for spot alumina to China jumped early last week as Chinese smelters resumed buying after a week-long public holiday. Strong prices of aluminium also supported higher prices of alumina last week.
China imports about half of its alumina demand.
Benchmark three-month London Metal Exchange aluminium price has fallen about seven percent to $1,746/$1,751 a tonne by 0812 GMT on Tuesday from last Monday's $1,880.
On the domestic market, duty paid spot imported alumina was trading at 4,600-4,700 yuan a tonne in Chinese ports, little changed in the past ten days, sources said.