LONDON, Aug., 16, 2011 /PRNewswire/ -- Platts Alumina Index (PAX) finished its first year of publication at $370 per metric ton (/mt) on August 12, 2011, down $49.50/mt from its late-April high of $419.50/mt. PAX, the world's first independently assessed daily reference for open market spot alumina prices, was introduced one year ago today by Platts, a leading global energy, petrochemicals and metals information provider and top publisher of benchmark price references.

"The first year of tracking alumina on a daily basis has shown that alumina prices react more quickly to changing supply/demand dynamics than previously realized," said Karen McBeth, Platts global editorial director of metals. "For the first eight months, alumina prices rose as aluminum smelters around the globe restarted capacity and alumina supply failed to keep up with demand. Recently, the market has come more into balance."

Alumina is a mineral produced from bauxite ore and used to make aluminum. Platts' assessments reflect the open-market spot value for metallurgical-grade sandy, calcined alumina, also known as smelter grade alumina, or SGA.

Australia, the world's largest producer of alumina, lost more than 350,000 mt of alumina output during the first half of 2011 due to the floods which plagued the state of Queensland from last December to April. The lack of Australian supply and increasing costs contributed to upward pressure on alumina prices, Platts observed. Late alumina shipments at the Brazilian port of Vila do Conde also factored into PAX's peak in April, Platts reported.

At the same time, producers have reported that more than 1 million mt of aluminum capacity has been restarted so far this year in response to the recovery in aluminum demand since the 2008-2009 financial crisis.

Nevertheless, since May, alumina prices have trended downward on easing supply worries in Australia and Brazil and as caustic soda and energy prices have declined. Caustic soda is used to dissolve bauxite in the production of alumina. A surge in alumina production in China, the world's largest consumer of alumina, and falling freight rates have also been driving alumina prices lower, noted Platts.

Alumina, like iron ore, is one of several commodity markets currently transitioning away from fixed annual contract pricing to spot market-based pricing. The PAX price assessments address the needs of miners, smelters, refiners, traders and others in the industry for an independent open-market source of daily price assessments that determine those valuations.

Platts' alumina and alumina freight assessments are published in the real-time service Platts' Metals Alert,  and the publications Platts' Metals Daily supplement and Platts' Metals Week, with monthly averages available as well in the Platts' Metals Week monthly supplement.

The methodology for Platts' alumina price assessments was developed in consultation with a cross section of key industry players, draws on Platts' century of experience in benchmark price reporting in energy, and is underpinned by robust quality guidelines.  Platts' metals markets reporting spans nearly 40 years, following the tradition of its parent company, The McGraw-Hill Companies, which has covered the metals markets for 80 years.

For more information on metals, visit the Platts website at www.platts.com

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SOURCE Platts