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China Bauxite Imports above 10 million mt again in Aug, Some Indonesian Mines Obtained Extra Export Quotas?
Sep 22, 2022 10:44CST
Source:SMM
According to General Administration of Customs, China imported 10.75 million mt of bauxite in August, up 1.48% month-on-month and 23.53% year-on-year. The import volume was still above 10 million mt with a slight increase from the last month.

SHANGHAI, Sep 22 (SMM) - According to General Administration of Customs, China imported 10.75 million mt of bauxite in August, up 1.48% month-on-month and 23.53% year-on-year. The import volume was still above 10 million mt with a slight increase from the last month. 

In detail, the imports from Guinea stood at 6.26 million mt, up 5.39% MoM and 43.46% YoY; Australia 2.83 million mt, down 10.29% MoM and up 1.56% YoY; Indonesia 1.61 million mt, up 10.67% MoM and 3.44% YoY; and Montenegro 55,100 mt, up 11% MoM, and no imports were recorded the same period last year.

Imports from Guinea:

Imports from Guinea stood at 6.26 million mt in August, up 5.39% on the month, and up 43.46% on the year. Most areas of Guinea are featured with tropical savanna climate, with the rainy season from May to November and the dry season from December to April. At present, Guinea is still in the rainy season, and the ore production and shipment changed little compared with that in July. However, from a year-on-year perspective, the imports from Guinea have demonstrated substantial growth. On the one hand, newly established alumina refineries in China, such as Bosai Wanzhou and Wenfeng, all use Guinea ore. On the other hand, due to the repeated mentioning of the Indonesia ore export ban, domestic alumina refineries using Indonesia ore begin to use Guinea ore as a alternative. Two factors have contributed to the aggravating demand for Guinea bauxite. And after the end of the rainy season in November, it is expected that the import volume of Guinea ore will show substantial growth. However, it is worth noting that the unstable regime and frequent strikes in the country will be an important factor affecting the normal mining and shipment local ore in the future.

Imports from Australia:

Imports from Australia stood at 2.83 million mt in August, down 10.29% on the month, but up 1.56% on the year. Among the three major importing countries, the import volume and prices of Australia ore are the most stable. The average import price of Australia bauxite in August was $46.2/mt, with an advantage over Guinea and Indonesia bauxite.  However, the organic content of Australia ores is relatively high, and the A/S of some ores is relatively low, which has high requirements for red mud sedimentation. In other words, using Australia bauxite requires more sophisticated production and processing technology of alumina refineries. 

Imports from Indonesia:

Imports from Indonesia stood at 1.61 million mt in August, up 10.67% on the month, and up 3.44% on the year. The rumours of Indonesia banning bauxite export have been fermenting since the end of last year, which is mentioned again in early September. According to SMM understading, Indonesian President Joko Widodo said on September 7 that Indonesia may lose a trade dispute with the European Union, which involves Indonesia’s ban on exporting nickel ore launched in 2020. Widodo reiterated that Indonesia will stop exporting unprocessed copper, bauxite and tin in order to encourage foreign investment and help the country to secure a better positioning in the resource processing value chain. Overall, the country's determination to ban ore export has been enhanced.

The import volume of Indonesia ore in August is relatively stable, without significant increase or decrease. Some Indonesian mines have obtained certain export quotas in the second half of the year, and it is expected that about one million mt of Indonesian ores will arrive in China every month in the fourth quarter. Meanwhile, the actual performing of the ore export ban may be delayed until early 2023, leaving more time for domestic alumina refineries using Indonesia ore to find alternatives, and the adverse impact on the domestic alumina industry has been slightly reduced.

On the whole, there is almost no increase in the supply of domestic ore, while the newly invested alumina capacity continues to be put into production, resulting in more demand for imported bauxite. Some mines in Indonesia have obtained additional export quotas. According to market participants, these quotas are only for export in the second half of 2022, and may be the last batch. In 2023, the Indonesian government will no longer issue bauxite export quotas.

The imported bauxite market, which has long been a buyer's market, has turned into a seller's market this year, evidenced by soaring ore prices. As of now, Guinea bauxite prices have risen 28% compared with the beginning of the year, Indonesia bauxite 21% and Australia bauxite 9%. In the face of such an unprecedentedly heated market, more industry participants step into this sector, and minerals that are relatively hard to find before, such as Ghana, Jamaica, Solomon, Turkey bauxite, have gradually showed up in the market. However, the prices of bauxite from these countries are relatively high, and neither the stability nor the volume of imports are comparable to those from the three major importing countries, hence domestic refineries were quite cautious in sourcing from these countries.

It is expected that the bauxite imports from the three major suppliers of Guinea, India and Australia will remain stable in September, with new suppliers showing up constantly.

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