China's alumina exports in September surged more than fivefold from August to 165,839 tonnes, according to customs data released on Tuesday, the highest monthly volume this year.
Last month's exports rose from 29,722 tonnes in August and were up more than 3,400 percent from a year earlier.China, the world's largest aluminium maker, rarely exports large volumes of alumina, a raw material for making the metal. However, alumina producers have been shipping more cargoes overseas this year to cash in on a favourable arbitrage between domestic and international prices amid tighter global supplies.
Worldwide output has dropped because of an outage at Norsk Hydro's alumina refinery in Brazil and a strike Alcoa's operations in Western Australia, while U.S. sanctions on United Company Rusal have made buyers wary of purchasing supplies from them.
International alumina prices climbed by 30.6 percent in the third quarter, incentivising Chinese exports, but are down 13.7 percent this month after the Alcoa strike ended in late September and Hydro said it would resume its Brazilian output at half capacity.
Jackie Wang, a Beijing-based analyst at metals consultancy CRU, said the bumper September number came after contracts for some 300,0000 tonnes of Chinese alumina exports were signed in August, when the arbitrage was "wide open."
Exports in August were down after June and July shipments exceeded 100,000 tonnes in June and July. A typical alumina cargo is 30,000 tonnes.
The arbitrage is now shrinking, Wang said, adding that her company is not aware of many export contracts signed in October.
China, historically a net importer of alumina, imported 30,000 tonnes of the substance last month, customs said.
(By Tom Daly; Editing by Neil Fullick and Christian Schmollinger)