Platts Australian alumina assessment closed the week at $310.50/mt FOB, decreasing $1.50/mt from Thursday, weighed by sluggish demand, the higher cost of credit in China, and concerns relating to counter-party risk. The assessment was down $1.75/mt on the week, and $10.50/mt on the month.
Bid, ask levels centered $309-312/mt FOB Australia.
A trade financing probe at China's Qingdao port has spooked market participants, raising the cost of borrowing from local and offshore banks, and prompting certain prospective Chinese alumina importers to step back.
At the same time, a few sellers may be experiencing pressure to offload tons before the northern summer holiday season takes participants out of the market in July and August.
Consumers have reported receiving offers of third-quarter shipments, as well as time swap requests.
China's ex-works Henan alumina spot price was rangebound through the week at Yuan 2,430/mt ($395) for 70:30 cash and credit payment terms, at par too with the same time a month ago.
Refiners' spot offers in Henan have risen this week to Yuan 2,450/mt cash to partial credit terms, from Yuan 2,430-2450/mt. This move to raise offers in the province followed a similar decision by several Shanxi and Guangxi refiners to raise spot offers earlier this month, citing higher costs.
Shanxi offers ranged from Yuan 2,400-2,420/mt cash to partial credit terms, up from Yuan 2,350-2,380/mt at end-May. Guangxi offers were at Yuan 2,230-2,250/mt, up Yuan 2,200-2,220/mt
But despite the raised offers, spot trades at the higher levels were lacking across all the regions, as market participants continued to eye domestic aluminum prices for direction, expressing concern over the sustainability of the firmer prices.
The front-month June aluminum contract on the Shanghai Futures Exchange closed at Yuan 13,305/mt Friday, up from Yuan 13,295/mt last week and also from Yuan 13,125/mt a month ago.
July spot negotiations are slated to start in the second half of June, sources said.
Market participants also continued to eye developments from the recent government probe into Qingdao port. Though the Qingdao situation has had marginal impact on the domestic alumina market so far, it has raised concerns over changes in bank financing policies looking forward, which would in turn impact trade, sources said.
China produced 3.94 million mt of alumina in May, up 6.1% year on year, according to data published Friday by the National Bureau of Statistics.
The May output was up 6.5% from April. Over January-May, China produced 18.87 million mt of alumina, up 7.5% year on year.
India's Nalco may have awarded late Thursday at $340+/mt FOB Visakhapatnam a sell tender for a 30,000 mt spot cargo for shipment between July 10 and 14, industry sources said. However the price couldn't be confirmed. The deadline for bids was June 10.