Chinese firm to import 2.5 mln tons of alumina

Jul. 21, 2009 (China Knowledge) - China's CPI Mengdong Energy Group, the parent of smelter HMHJ Aluminum, has signed an agreement to purchase 2.5 million tons of alumina from international trading house Trafigura Group, sources reported.

The alumina will be delivered to the Chinese buyer at intervals during a ten-year period beginning in 2010, according to the source.  

The contracted price of the alumina will be less than 14% of the price of the three-month aluminum contract of the London Metal Exchange MAL3. The price will also be 10% less than the current spot price of alumina in China.

HMHJ's facilities in Inner Mongolia will be able to produce 700,000 tons of primary aluminum in 2010 but will require 1.4 million tons of alumina. Trafigura's contract will meet 18% of the company's alumina demand.

An industry insider said that CPI Mengdong and Trafigura's contract will not increase China's alumina supply due to the long delivery time of ten years.