SHANGHAI, Apr 25 (SMM) - Customs data showed that China imported 11.7 million mt of bauxite in March, up 13.58% MoM and 15.79% YoY. Imports from Australia were 2.95 million mt, up 15.62% month-on-month and down 4.64% year-on-year; imports from Guinea were 6.18 million mt, an increase of 2.89% month-on-month and 7.83% year-on-year; imports from Indonesia were 2.48 million mt, a month-on-month increase of 45.22%, and year-on-year increase 104.75%. China began to import bauxite from Montenegro and Iran. China imported 32.7 million mt of bauxite in Q1, up 20% YoY.
Imports from Australia showed seasonal decline at the beginning of the year, but may pick up in Q2. Arrivals from Indonesia were mainly long-term orders signed previously. For the subsequent import volume, it is necessary to continue to pay attention to whether Indonesia will introduce measures to restrict the export of bauxite. Indonesia entered the rainy season in Q2, which will affect bauxite mining and shipments. Hence, import volume from Indonesia may fall back in April.
The import volume from Guinea in March far exceeded the combined import volume from Australia and Indonesia, and once again refreshed the historical high. The main drivers behind record high imports from Guinea were as follows:
First of all, the current Indonesian export ban policy still faces lots of uncertainties. The rainy season caused delays in shipments for most orders. In order to ensure production stability, Chinese alumina refineries that originally used Indonesian ore began to use more stable Guinean ore. Following the news that Indonesia would ban bauxite exports, China's dependence on Guinean ore continued to grow.
Secondly, the production of domestic bauxite in Shanxi, Henan, Guizhou and other places is hardly optimistic. At present, alumina refineries are keen to increase bauxite stockpiles amid high alumina prices and profits. In the context of tight domestic supply, Guinean ore is favoured by Chinese alumina refineries.
In addition, in March 2022, the Guinean government suspended all activities at the Simandou iron ore mine, the world's largest undeveloped iron-rich mine, citing slow construction progress. Mining companies are facing growing pressure from the Guinean government to build alumina refineries in the country. It should not be ruled out that Guinea may impose certain restrictions on the export of ore in the future. At present, domestic leading enterprises such as Chinalco and Weiqiao have maintained stable bauxite mining and transportation in Guinea, allowing domestic alumina refineries to increase their purchases of Guinean ore.
On the whole, Guinea is China’s largest source of imported bauxite. Guinean bauxite is mainly used by alumina refineries in Shandong, and was also widely used in low-temperature production lines in Shanxi and Henan in 2019. Since the end of 2019, several mining companies in Guinea such as EGA, Chalco, United Mining and State Power Investment began to mine and export one after another. At the same time, the domestic demand for Guinean ore continued to increase. However, in recent years, many countries have begun to focus on their own energy reserves and industrial development, especially non-renewable resources. In order to have access to stable ore resources, Chinese alumina refineries may need to build alumina refineries overseas.