Spot trading of imported ore was subdued. Large-scale alumina plants using imported bauxite in the coastal areas of China basically locked in quarterly or annual contracts at the end of last year, and their existing bauxite inventories can sustain production for 3-6 months. This has kept those plants from purchasing spot cargoes.
As for inland alumina plants, those that used imported bauxite to maintain high operating rates have been under intense pressure due to the high cost.
Operating rates of alumina plants in Shanxi and Henan have dropped significantly this year. Xiangjiang Wanji has stopped the production line using imported ore, and only purchased domestic ore to maintain production for long-term contracts, and the average operating rate has been reduced to about 60%. Other inland plants barely accepted the current high-priced imported ore. Alumina plants pushed for lower purchase price of imported bauxite to reduce losses. However, sellers have declined to lower prices considering the new alumina production capacity (1 million mt at Lubei Chemical Phase II, 1.2 million mt at Tiandong Jinxin Phase II).
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