This report is part of the S&P Global Commodity Insights’ Metals Trade Review series, where we dig through datasets and digest some of the key trends in iron ore, metallurgical coal, copper, alumina, cobalt, lithium, nickel and steel and scrap. We also explore what the next few months could bring, from supply and demand shifts to new arbitrages and quality spread fluctuations.

The global alumina market is expected to face pressure in the third quarter of 2025, driven by increasing supply from new refinery projects ramping up in Indonesia.

However, market sentiment was mixed amid prevailing global trade uncertainties, with participants monitoring Chinese arbitrage trends and Guinean bauxite supply for clearer direction.

“In the near term, we expect the market to remain sensitive to potential fluctuations in bauxite trade(opens in a new tab) and any delays in the schedules of ongoing projects,” said Karen Norton, principal aluminum analyst at S&P Global Commodity Insights. “Looking further ahead, it is important to recognize that these projections are largely contingent upon the success of the alumina projects and expansions, and also the downstream strategies in countries such as Indonesia and Guinea.”

Platts, part of Commodity Insights, assessed the benchmark Australian alumina price at $368/mt FOB on July 16. Q2 saw FOB Australian prices hold firm within the $329-$375/mt range, while the FOB Brazil Atlantic Differential hovered at a $20-$25/mt premium.

Meanwhile, the Platts-assessed Chinese domestic alumina price was at Yuan 3,200/mt ex-works Shanxi on July 16, with Q2 prices fluctuating within the Yuan 2,850-3,310/mt ex-works Shanxi range.

Refinery projects in Indonesia

In Q2, alumina prices were mostly rangebound as market participants adopted a cautious stance while monitoring the progress of new refinery projects in Indonesia. These include Hangzhou Jinjiang’s PT Borneo Alumindo Prima refinery, Shandong Nanshan’s Bintan Alumina Indonesia Phase III expansion and PT Borneo Alumina Indonesia’s Mempawah refinery.

Moving into Q3, pressure from anticipated increased supply coming out of these projects remains robust, market participants said.

Hangzhou Jinjiang’s 1 million mt/year PT Borneo Alumindo Prima refinery has commenced commercial sales following the acquisition of its export sales permit in Q2, a source familiar with the plant told Platts, noting that the operational capacity has been rising gradually. The source indicated that reaching full operational capacity depends on current inventory levels.
Currently, products are shipped in bags, but bulk shipments, which are preferred in the seaborne market, are anticipated to start by Q4, the source added.

Shandong Nanshan’s Bintan phase III expansion, with a capacity of 1 million mt/year, was commissioned in July. Production output is expected to stabilize in August, a source familiar with the plant said.

The refinery capacity is expected to start at 500,000 mt/year and gradually ramp up to full capacity, with phase IV expected to be commissioned in Q4, market sources said.

The 1 million mt/year Mempawah refinery is operated by PT Borneo Alumina Indonesia, which is jointly owned by PT Indonesia Asahan Aluminium, or Inalum, with a 60% stake and PT Antam with a 40% stake.

A source familiar with the plant told Platts that production is currently in process and is not for external sales primarily because Inalum, as a shareholder, will mainly buy the alumina produced by Mempawah refinery.

Although the additional supply expected from Indonesia is likely to pressure alumina prices down moving forward. Market participants said the eventual impact would greatly depend on the actual volumes made available in the spot market at the time.

Guinean bauxite supply

China’s overall bauxite imports saw robust volumes in April and May, which totaled 38.19 million mt, bolstered by strong demand from refineries and supply from Guinea, despite some bauxite mines facing operational challenges following the Guinean government’s May announcement to cancel 51 mining licenses across various minerals.

Guinea, holding the world’s largest known reserves of bauxite, maintained its position as China’s top bauxite supplier through April and May, with May volumes exported to China reaching 13.2 million mt and April volumes totaling 16.7 million mt, China’s customs data showed.

Q3 term contracts for standard-grade Guinean bauxite were negotiated at around $75/dmt on a CIF China basis, according to market sources. Spot prices were reported to be trading close to parity with term contract prices, hovering around the mid-$70/dmt level.

As Guinea enters its peak rainfall season, bauxite mining and export activities might experience disruptions, resulting in reduced output and logistical challenges, sources said. While potential increases in bauxite prices could support alumina prices, upward movement might be limited by downward pressure from heightened supply, they added.

Sources highlighted that uncertainty persists in the bauxite supply, as some mines might resume production after temporary reductions. This could weigh on bauxite prices and, in turn, create room for potential price declines in alumina.

Arbitrage opportunities for Chinese imports

With rising Indonesian supply and pressure on FOB Australia prices, some market participants were closely monitoring the shift in arbitrage opportunities into China. There has been growing talk that Q3 oversupply in the seaborne market might reopen the import window for China as the price gap between seaborne and domestic Chinese alumina widens.

Some participants said the arbitrage is now theoretically workable, though actual transactions remain uncertain. Domestic Chinese production is also ramping up, with new capacities gradually lifting output, and that could impact arbitrage opportunity, they added.

Q3 market sentiment is currently mixed. Some expected the FOB Australia alumina prices to find a floor supported by Chinese imports, while others maintained caution as the arbitrage dynamics evolved.
Source: Platts