The Heavy Rain in Shanxi Has Caused Bauxite Mines to Stop Production, Affecting Alumina Plants

SHANGHAI, Oct 9 (SMM) - As of this Friday October 8, the SMM weighted average alumina price index stood at 3884 yuan/mt, an increase of 64 yuan/mt from before the holiday; Shanxi reported 3850-3950 yuan/mt, an increase of 100 yuan/mt from pre-holiday; Shandong reported 3850-3900 yuan/mt, an increase of 75 yuan/mt compared to before the holiday; Henan reported 3850-3950 yuan/mt, an increase of 50 yuan/mt compared with pre-holiday; Guangxi reported 3700-3700 yuan/mt, Guizhou reported 3800-3900 yuan/mt, both flat from before the holiday; Bayuquan reported 3900-4050 yuan/mt, an increase of 75 yuan/mt from before the holiday.

Due to the heavy rains, the open-pit bauxite mines in central Shanxi were basically shut down. Part of the alumina factories that use of domestic ore had less than 10 days of inventory. Meanwhile, the transportation efficiency of coal, caustic soda and other raw materials to Shanxi reduced due to transport disruption. The operating capacity of the some alumina factories has dropped from 4,000 mt per day in September to the current 2,000 mt per day.

At present, Xinfa Chemical Co. in Xiaoyi, Shanxi has to stop one alumina production line due to the rainwater that poured into the factory, which involves an annual production capacity of about 1.2 million mt. If the rainfall reduces in the following few days, the standing water in the factory can be discharged within about 3 days, and the normal production can be restored, according to SMM.  The rainfall has not caused any interference to the operation of other alumina factories with higher terrain for the time being. SMM will continue to watch the impact of heavy rains on local open-pit mines in Shanxi, as well as the obstruction of road transportation caused by floods and restrictions on the circulation of raw materials and alumina.

The transaction prices of overseas alumina rose to $480/mt last week. According to a foreign media on October 7,  Jamalco alumina plant (with an annual production capacity of 1.4 million mt) in Jamaica, which was closed in August due to damages caused by the fire, is not expected to resume production until the end of September 2022. The Alumar alumina plant (with an annual capacity of 3.5 million tmt), which cut the production by one-third due to technical problems in July, has not disclosed any news as when to resume production. The shortage of overseas alumina supply will continue in the near term, and prices will stay high.

After the National Day holiday, the quotations of the alumina factories in north China have generally moved up to more than 4,000 yuan/mt, and the quotations in south-east China are around 3900 yuan/mt. The market will maintain an upward trend in the short term.