Metalnewsnet 7 May:

Chinese alumina consumers continue to resell contracted Australian material to the tight global market as they take advantage of large domestic stockpiles at cheaper prices, market sources said. In March, MB reported that contracted cargos to China were being resold to western aluminium producers as it was cheaper to buy Chinese alumina when all costs were taken into account.

There is a sufficient amount of Chinese alumina being produced, leaving buyers with contracted tonnages to resell the material, sometimes even into the Atlantic market, trading sources told MB. "It's happening on both cif and fob material," he said. "Contracts were set with Australian producers to guarantee supply but China is producing enough," he added, noting demand for alumina in China was relatively strong.

Chinese buyers that bought material at a contract price lower than current spot prices can make a small margin by selling cargoes on to the market, a second source said. The material has been diverted as far afield as Argentina and Iceland, he said. "Chinese consumers are reselling to non-Chinese customers," he said, adding that material was trading in the spot market at around $345 per tonne fob Australia. Spot alumina is changing hands within a wide range of $320-350 per tonne fob with few transactions reported.

Contracted material headed for China is being resold to both traders and western aluminium producers, a second trading source agreed. "Demand is there in China but it's being satisfied by domestic production," he added. Pacific material is being used to cover business normally supplied by the Atlantic market, the source agreed. "The Atlantic continues to be short so consumers are picking up Pacific cargoes instead," the second source said.