Price volatility
Alumina prices rallied throughout 2024, culminating in record-breaking numbers.
Fastmarkets calculated its daily benchmark alumina index, fob Australia at $805.83 per tonne on December 4, its highest level ever.
Last year’s all-time highs were a result of persistent, chronic supply-side pressures that worsened throughout the year.
In 2025 so far, alumina prices have declined by 42.1% from $670.98 per tonne at the beginning of the year, prompted by excess supply and muted consumer demand, alongside reduced concern over bauxite supply.
And a surplus of units in the spot market, particularly of Vietnamese, Indian and Indonesian origin, has also been seen.
Expansion projects
One of the hottest topics in 2025 is expansion projects and new sources of supply.
Western Australia’s historic grip on bauxite and alumina production ex-China is threatened to be usurped by operations in Vietnam, India and Indonesia.
Market participants are closely monitoring the expansion of Vedanta’s alumina refinery at Lanjigarh, in the state Indian of Odisha, with the companying aiming to boost its operation to 5 million tonnes per year in due course.
Indonesia is also set to become a major participant in the market.
Indonesian expansion projects include the Smelter Grade Alumina Refinery (SGAR) operation by PT Borneo Alumina Indonesia (BAI) — a joint venture between PT Indonesia Asahan Aluminium (Inalum) and PT Aneka Tambang (Antam).
Phase 1 of SGAR began on September 24, 2024, with the refinery aiming to produce 1 million tonnes of alumina in 2025. Once completed, Phase 2 starts, with estimated production expected to reach 2 million tpy.
In addition to SGAR, two other new alumina refineries are nearing completion — PT Dinamika Sejahtera Mandiri, with capacity for 2 million tpy, and PT Quality Sukses Sejahtera, with capacity for 1.5 million tpy.
Meanwhile, Vietnam is slightly lagging behind, but with its huge bauxite reserves and Vincamonim’s plan to invest $7.3 billion in the domestic aluminium industry, it is only a matter of time before its production expands as well.
The increased importance of Indonesia-, Vietnam- and India-origin alumina in the international market has created industry demand for more detailed pricing information for markets ex-Australia.
As a result, Fastmarkets launched three new inferred indices in early September 2024 to reflect the growing importance of these markets across the aluminium value chain.
Security of bauxite supply
After Guinea’s market-moving decision to ban exports of EGA’s bauxite, the security of ore supply has become a pressing issue.
According to the US Geological Survey, Guinea is home to the world’s largest bauxite reserves, with 7.3 billion tonnes of the ore found in the Northwest African country.
China relies heavily on Guinea for its imported bauxite, meaning any disruption in the supply chain can cause ripple effects across the global aluminium market.
Fastmarkets’ monthly price assessment for bauxite, cif China jumped by 20.25% month on month to $90-100 per dry metric tonne (dmt) in November 2024, from $78-80 per dmt in the prior month.
Bauxite prices reached all-time highs of $115-130 per dmt in January 2025 and have since trended down, with Fastmarkets assessing bauxite, cif China at $90-95 per dmt in March.
Since October last year, sources have questioned the security of bauxite supply and pondered how sustainable the market’s reliance on Guinea is.
This is especially so considering the volatile civil and political backdrop in the country, particularly after a coup d’état in September 2021.
There is plenty of bauxite all over the world outside of Guinea, but will projects – both new and old – evolve to meet the world’s growing demand for aluminium?
Declining alumina prices offer scant consolation amid declining P1020A premiums
The lower alumina price is reportedly good for aluminium production, but regional demand for P1020A remains weak.
“Sure, the profit margin from aluminium production is better than when alumina price was record high and when alumina index was about 30% of the London Metal Exchange (LME) 3-month aluminium price,” a producer source said.
“But the p1020A premiums have fallen so much the ingot demand in Europe is still weak-to-stable,” the same source said.
Fastmarkets’ most recent twice-weekly assessment for aluminium P1020A premium, in-whs dp Rotterdam, at $190-220 per tonne on March 26, down from $340-370 per tonne on December 6, 2024 – the closest assessment to when the alumina index recorded all-time-high at $805.83 per tonne on December 4, 2024.
The selling pressure, which was mainly driven by the LME cash/three-month spread being in backwardation until March 25, has slightly eased now the spread flipped to contango on March 26.
“With the move in spreads, the fortune could turn around,” a European trader said.
The potential for changing fortunes in the European P1020A market will be one of the topics dominating the Fastmarkets’ Bauxite & Alumina Conference in Miami.
Trump, Ukraine and global geopolitics
Tariffs and trade wars will be another focus for many during Fastmarkets’ Bauxite & Alumina conference next week.
US President Donald Trump has unveiled a package of tariffs on imported material, with aluminium finding itself center stage in this unfolding trade war.
The imposition of 25% tariffs on all US imported aluminium has caused an uptick in bullish sentiment, particularly in the domestic market.
Fastmarkets assessed the aluminium P1020A premium, ddp Midwest US, at 37-40 cents per lb on March 25, up 71.1% from 22-23 cents per lb at the beginning of the year.
But the indirect effect on the alumina market is harder to pin down, with delegates likely to debate this topic in Miami.
Some sources maintain that alumina could be swept up in the wider bullish environment, especially with the LME aluminium price maintaining its strength above $2,600 per tonne since mid-January.
But others note that while trade flows change on the metal side and aluminium costs become inflated – particularly in the US – downstream costs could also go up, in turn affecting demand.
For instance, one source told Fastmarkets that if upstream operations at US producers are curtailed or reduced from cost pressures it would undoubtedly be bearish for the alumina market.
Now, participants are keeping an eye on President Trump’s next announcement. The president has called April 2, the roll-out day for the reciprocal tariffs, the nation’s “Liberation Day” – but market participants remain unsure what will be announced on the day, or even closer to the day.
“With Trump, you can never predict what he will do. He’s been quiet on tariffs in the past week or so, but he can announce anything at any point, and it can change the material flow,” a third European trader said.
The “fear” of Canadian aluminium being diverted to Europe has been additionally putting pressure on Rotterdam premiums, but no additional tonnage shipped to Europe has been confirmed, Fastmarkets understands.
In addition, there are some expectations that the Russia-Ukraine war may end earlier than expected, now that the US is involved in the peace talks.
“If the war ends, there won’t be any reason to self-sanction and not to take Russian materials,” a fourth European trader said.
According to Fastmarkets’ research, EU’s imports of Russian unwrought aluminium have fallen over the past two years, from more than 100,000 tonnes in March 2022 to roughly 20,000 tonnes in December 2024.
Navigating political uncertainty and market volatility is likely to be a big talking point at Miami.
To find out more about the Fastmarkets Bauxite and Alumina conference, click here.
