China Bauxite Imports in December Rose 13.32% MoM

SHANGHAI, Feb 16 (SMM) - According to General Administration of Customs China imported 8.73 million mt of bauxite in December, up 13.32% month-on-month and 16.4% year-on-year. In details, the imports stood at 2.9 million from Australia, up 9.39% MoM and 44.14% YoY, 3.56 million mt from Guinea, up 10.25% MoM and down 17.13% YoY, and 2.26 million from Indonesia, up 24.53% MoM and 132.17% YoY.

Looking back on the entire 2021, improts from Guinea reached 54.84 million mt, accounting for 51.1% of China’s total imports, an increase of 4.2% year-on-year. China's dependence on Guinea's ore resources has continued to increase. Chinalco, EGA, China Power Investment, etc. have maintained stable ore output in Guinea. Domestically, Huaxing Aluminium, Jiaokou Xinfa, Xiaoyi Xinfa and some inland alumina plants that are in lack of ore supplies have contributed to the increase in demand. The coup in Guinea in September 2021 aroused concerns about the supply of ore. Although China’s import volume maintained positive growth, the overall stability of ore imports still has potential risks as Guinea’s regime was unstable evidenced a large-scale strike on January 18, 2022. China imported 34.08 million mt of ore from Australia throughout 2021, accounting for 31.7% of China’s total imports and down 7.9% YoY. In the first half of 2021, due to changes in China-Australia trade relations, the imports from Australia decreased. In addition, Australia entered the rainy season in the fourth quarter, which also affected the mining and shipment of ore and further deepened China’s dependence on Guinea ores. China’s ore imports from Indonesia in 2021 took up 16.6% of China’s total imports, down 4.2% YoY. Indonesia president has repeatedly mentioned plans to ban the exports of commodity raw materials in 2022 in an effort to boost the country’s manufacturing sector. It is not the first time that Indonesia banned the exports of ores. The probability of another export ban in 2022 is high, but it is unlikely that the scene where China's bauxite trade pattern underwent great changes due to the country's export ban in 2014 to re-stage. Yet, for some alumina plants in China that have used Indonesia ores, the production stability will be disturbed, and production costs and risks will be unreasonably heightened due to technological transformation or the use of other ores. On the whole, the ore resources available in the market around the CNY dropped. Most of the alumina plants that use imported ore have already built the stocks for winter, hence the spot market was inactive. The prices of imported ore still fluctuated based on the ocean freight.

Anyhow, with the exhaustion of domestic bauxite, China will be increasingly reliant on the imports. According to the monitoring and forecast of new alumina projects, it is estimated that 6.6 million mt of new capacities will be built in China in 2022. Most of the projects are located in coastal port areas and mainly use imported ores. Among them, enterprises assured to be put into operation in the first half of 2022 include two alumina plants: Bosai Wanzhou and Hebei Wenfeng, involving a combined capacity of around 4 million mt on positive estimate. The rising capacities will create more demand for ore imports. It is expected that the bauxite imports will stand above 100 million mt in 2022. It has become the mainstream keynote for the future development in the alumina sector to actively improve production technology to reduce ore consumption, optimise domestic ore exploration, improve domestic coal-based aluminium desulfurisation technology, and seek more imported ore substitutes.