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.
