Highlights

  • FOB Western Australia alumina reached US$397/t on 9 Nov, up from US$393 on 29 Oct, after the LME-linked benchmark was assessed at US$394.50 on 30 Oct.
  • New overseas smelting capacity, notably in Indonesia, and refinery Supply constraints are lifting Demand for seaborne cargoes even as China is oversupplied.
  • China's surplus and record-high inventory cap upside; watch Indonesian demand, Chinese export offers and the alumina-to-aluminium ratio.

After a brutal slide, the price of the white powder that smelters turn into aluminium has climbed back toward US$400 a tonne, though China is still awash with it.

What happened

Alumina free-on-board Western Australia was priced at US$397 a tonne on 9 November. That is up from US$393 on 29 October, a gain of about 1.0%.

Real cargoes back that up. A 30,000-tonne lot for December loading traded at US$397 FOB Western Australia on 4 November, after a November-loading cargo went at US$394.50 on 26 October.

The benchmark behind the LME's alumina contract assessed FOB Australia at US$394.50 on 30 October, up 2.46% in a day from US$385.01, a move that outpaced aluminium's 1.40% gain. A later figure was not available.

Not every assessment moved. A separate FOB Australia index was flat at US$390.58 in the same period, and Indian material traded cheaper, with a 30,000-tonne FOB India cargo going at US$361 on 23 October.

Why it happened

The rebound is driven by smelters outside China. Nanshan Aluminium said overseas alumina averaged about US$321 a tonne in the first nine months of 2026, down 22% on a year earlier, but recovered in the third quarter on new overseas smelting capacity and supply constraints at some refineries.

Indonesia is central. Rising alumina demand from Indonesian smelters and drought conditions restricting bauxite barge access are both in play. A daily FOB Indonesia alumina differential was launched on 2 November, citing an expected 30% jump in Indonesian refining capacity to 10.8 million tonnes a year in 2026.

Costs are firming slightly too. Chinese refinery costs rose 21 yuan to 2,764 yuan a tonne in October, mainly on dearer coal.

The recovery comes from a low base. Alumina fell from about US$800 a tonne in 2025 to around US$315, so today's price is still less than half of last year's peak.

How it plays out

China caps the upside. The domestic index fell to 2,649 yuan a tonne on 29 October, total alumina inventory rose 143,000 tonnes in a week to about 7.65 million, and spot prices are expected to keep falling.

Chinese refineries are hardly straining, either. The national operating rate stands at 77.18%, with 92.32 million tonnes a year of capacity running out of 119.62 million built, so idle plants could restart if prices justify it.

That gap matters. Landed Australian alumina was about 711 yuan a tonne dearer than China's domestic index on 9 November, so Chinese buyers have no reason to import. That leaves seaborne prices dependent on demand from Indonesia, the Middle East and elsewhere.

Winners are Australian and Indonesian refiners selling into that market. Losers are non-integrated smelters outside China, whose raw-material bill is rising while LME aluminium has slipped from its highs; three-month metal hit a three-week low on 10 November before rebounding 1.3% to US$3,050.

Next week, watch the first readings of the new Indonesian differential, any Chinese export offers, fresh FOB Australia cargo deals and the alumina-to-aluminium price ratio. A fall in China's domestic price or recovering Gulf smelter demand would be the clearest signals for direction.