Reuters reports term alumina to China for 2012 shipments is being indicated at about 15.5 to 16% of the price of primary aluminium on the London Metal Exchange after India's state-run National Aluminium Co Ltd sold 300kt at about 16% last week.
Major Chinese importers have paid 14.8-15.5% for 2011 shipments of Australian alumina on a free-on-board basis versus 14.5-15% in 2010.
"Major (Chinese) importers of alumina are unlikely to accept more than 15 percent. To us, any offers above 14.5% are too high," said a trading manager at a large aluminium smelter, which is also a large importer of alumina.
The trading manager said many smelters in China expected the country's supply and demand of alumina to be nearly in balance next year.
Alumina is the main raw material for the production of primary aluminium. About two tonnes of alumina are needed for one tonne of metal in China.
China's 46Mt/y of alumina capacity would produce 95% of the alumina needed domestically this year due to expanded capacity, state-backed research firm Antaike has predicted.
Some Chinese smelters needed to import alumina linked to metal-supplying contracts signed for good-quality Australian alumina and to multi-year term contracts signed in previous years.
But firm LME aluminium prices and increased yearly percentage for 2011 alumina shipments have prompted Chinese importers to resell large amounts of contracted imports due to arrive China to the international market in the past few months, smelter sources and traders said.
Smelter sources estimated more than 2Mt of alumina had been resold so far this year.