Suppliers of specialty calcined alumina products have
witnessed an improvement in demand for material from their
customers, reversing a previous sluggish buying trend that
had led to severe price falls for all grades during 2020.
In conversation with Fastmarkets in early January, at
least three large-size producers spoke of "significant"
changes in their volume of inquiries between the end of the
fourth quarter of last year and the beginning of this
"We went from a situation of clear high availability
across all products into the fourth quarter, and we
approached negotiations knowing that we were long [on some
grades]," one producer said. "But we’ve seen a
change in tack when it comes to orders."
"We have noticed an uptrend indeed, but from a low level.
Whether this, or let's say a higher, consumption level
becomes sustainable remains the essential question," a second
Sellers speaking to Fastmarkets in recent months said they
were aware that, against low demand, availability was more
than sufficient to cover consumption, and inventory had been
built up across the system. And with inquiries increasing
against broadly unchanged production rates, these sellers
hope this will lead to a progressive rundown of stock levels
in the short term. This could then create better conditions
for a recovery in market prices, sources said.
"As cost levels are not [expected] to decrease, suppliers
may expect some higher prices later in the year if the
[consumption recovery] remains in place," the second supplier
added. Another producer spoke of "cost increases on logistics
and feedstock," adding that "demand is very strong at the
A third supplier said: "Demand is now higher from all
markets, including batteries, ceramics and semiconductors,
but mainly it’s refractories that is recovering
after almost a year of absence. Our availability now is zero
for the next two to three months."
Market prices for calcined alumina materials fell
heavily in the first half of 2020, when the effect of the
Covid-19 pandemic on consumption worsened the oversupply
situation that had first surfaced during 2019.
The prices of the three calcined alumina grades that
Fastmarkets assesses fell by between 9% and 12% on average at
the midpoint between January and July 2020. And the price
fall is even greater when comparing those in July 2020 with
the last time the market peaked in May 2019; over this
period, prices have lost about 19% of their value at the
The market mostly stabilized in the second half of last
year. Fastmarkets’ monthly price assessment for
alumina, calcined, unground, 98.5-99.5% Al2O3, bulk, exw
US/Europe, long-term contract held at $600-700 per tonne on
January 7, unchanged since August 6.
Similarly, the price assessment for alumina, calcined,
ground, 98.5-99.5% Al2O3, bulk, exw US/Europe, long-term
contract remained stable at $700-800 per tonne; and the price
assessment for alumina, calcined, ground and unground, min
99.5% Al2O3, medium-soda min 0.25% soda, bulk, exw US/Europe,
long-term contract held at $600-750 per tonne, following a
$50 increase on the top end in December.
With the sharp downward move in 2020, prices have reached
a low last reached in 2011-12, according to
Fastmarkets’ historic price database. In other
words, in a very short time the market lost all the gains it
had raked in during 2016-19, a time of rising demand and
Sources believe that part of the recent change in demand
flow can be attributed to restocking. After several months of
little or no orders from consumers that were working through
inventory they had in-house, it is likely that some have now
returned to the market to replenish and ensure they are
covered to meet their 2021 consumption rates.
This is said to be the case especially for Europe, where
refractories producers tend to work with a relatively low
level of inventory at plant.
"The business model [for Europe] is to supply with short
lead times, for them to manage the low inventory level," one