Market Anticipates Ban on Indonesian Bauxite Exports by 2014

SHANGHAI, Mar. 26 (SMM) - Aluminum industry insiders consulted during the 8th “Shanghai Copper & Aluminum Summit” indicate that Chinese consumers of imported bauxite are concentrated in Shandong, Chongqing, and Henan, and represent a combined alumina capacity of 17.9 million mt/yr. Assuming 2.8 mt of bauxite is required per ton of aluminum produced, 50.12 million mt of bauxite must be imported to meet current demand.

Indonesian and Australia bauxite accounted for over 95% of China’s total bauxite imports last year. China began to source bauxite from Fiji, Ghana, Guinea and Guyana after Indonesia began to restrict the export of unprocessed bauxite. Chinese producers nonetheless still prefer Indonesian bauxite due to its price and quality. 

The market now anticipates that Indonesia is likely to move ahead with its full ban on raw ore exports in 2014. This includes bauxite. Should such come to pass, China’s alumina producers relying on imported bauxite will be compelled to reconfigure their supply relationships.  

The Indonesian Nickel Association (ANI) and Philippine Nickel Industry Association held a conference early this month. The ANI reiterated that the Indonesian government will impose a full ban on raw ore exports in 2014 and encourages enterprises to build plants in Indonesia. SMM believes Chinese alumina producers will face rising bauxite prices once Indonesia bans raw ore exports.