Alumina supply is continuously improving, but in the short term, it remains difficult to quickly address the supply gap, especially with the frequent heavy pollution control measures and emergency responses during the heating season. In the near term, the market should pay attention to the dynamic balance of supply and demand, as well as the alumina companies' ore stockpiles and their ability to ensure continued supply before the end of the year. Additionally, attention should be given to future weather changes and the measures taken by aluminum producers to increase their alumina reserves.

Sudden weather factors and unexpected production events, along with various other emergencies, are influencing the sentiment and judgment in both the spot and futures markets for alumina. Recently, the unexpected events have generally favored the bullish trend of alumina prices. The spot market has maintained a high premium, with the premium typically ranging from 100 to 150 yuan above the website's quoted price for immediate spot transactions. For alumina with more convenient delivery or better market branding, the premium can even reach around 200 yuan in personalized transactions.

In the future, the improvement of alumina shortage or gradually approaching the balance is expected to come from the change of the demand side earlier, so quantifying the potential production reduction scale of electrolytic aluminum in the recent stage and the resulting change in alumina demand is an important basis for judgment.

Considering the high-profit incentives stimulating production enthusiasm, the optimistic forecast suggests that alumina actual production may reach around 7.38 million tons. The neutral forecast estimates primary aluminum production at approximately 3.62 million tons, with net exports of 150,000 tons and consumption by non-aluminum industries at 350,000 tons (approximately 50,000 tons less than the normal value). Based on these figures, it is expected that there will be a shortage of about 50,000 tons of alumina supply in November. The key variables to consider are: Whether extreme weather, environmental controls, or frequent maintenance might affect the actual alumina production and prevent it from reaching the ideal forecast. Whether the actual volume of alumina net exports (as per customs data) may increase. These key factors have a significant impact on the supply-demand balance. Overall, we expect the alumina supply-demand balance in November to likely result in a shortage of 50,000 to 100,000 tons, with the shortage narrowing but continuing on a monthly basis.

The supply of alumina is expected to continue growing cyclically. Although the demand for alumina has been somewhat impacted by the relatively sporadic production cuts from electrolytic aluminum enterprises in Henan, the demand remains on an upward trajectory due to the ongoing new production and recovery of plants such as Xinjiang Bingzhun, Shuangyuan Aluminum, Anshun Aluminum, Sichuan Qimingxing, and Huayun Phase III. Coupled with the current relatively strong market exports of alumina, we believe that the alumina supply-demand balance is likely to shift from a previous monthly shortage of around 200,000 tons to a shortage of about 100,000 tons by the end of the year. Additionally, consideration must be given to the approaching winter snowfall, which may affect transportation, as well as the relatively concentrated safety stockpiling demands for spot alumina and long-term contracts from electrolytic aluminum companies with low inventories. It is expected that the increase in alumina from new alumina projects by year-end will primarily meet the shortfall for some long-term contract customers, ultimately leading to a relative increase in the inventory safety days of alumina for a few large electrolytic aluminum enterprises. For small and medium-sized electrolytic aluminum companies that have not signed long-term contracts by the end of the year, they are expected to continue replenishing their stock through spot purchases in the market.

The market supply and demand relationship has not fundamentally changed; it can only be described as improving. It is expected that with the steady increase in operational capacity in the future, the execution of long-term contracts will improve compared to earlier periods. However, as the heating season begins, frequent control measures due to heavy pollution and the arrival of snowfall will likely create a seller's market in the limited alumina spot market, favoring higher-priced transactions.