CHINA is shipping unusually high volumes of alumina for a second time this year to an international market desperate for the ingredient used to make aluminum, traders and analysts said, even as domestic prices rise put pressure on smelters.

Contracts to export over 140,000 tons of alumina from China were signed in July amid a favorable price arbitrage, according to consultancy CRU. That’s almost three times as much as was exported all of last year, Chinese customs data shows.

China, the world’s top aluminum producer, has rarely exported significant volumes of alumina. That changed in April when U.S. sanctions on Rusal compounded an outage at Norsk Hydro’s Alunorte plant in Brazil, deepening a global shortage of the white powder.

International alumina prices are up 37 percent year-to-date to just under US$560 a ton, making Chinese exports profitable even though spot alumina prices in the smelting heartland of eastern China have surged by 20 percent from end-June to 3,300 yuan (US$480.07) a ton.

High alumina prices have been a boon for China Hongqiao Group, whose revenues for the material increased almost fivefold year on year in the first half of 2018. Australian duo South32 Ltd. and Alumina Ltd. are also cashing in.

Smelters without their own alumina refineries, however, are suffering from high input costs, and the situation could worsen, industry sources warned.

China is also set to repeat 30-percent output curbs on alumina in 28 northern cities this winter, further tightening supply.

(SD-Agencies)