According to SMM data, the theoretical demand for domestic ore for metallurgical-grade alumina production is 71.14 million tons, and that for imported ore is 140.37 million tons in 2023. The total theoretical demand is 211.51 million tons.
On the supply, domestic bauxite supply was 65.52 million tons in 2023, bauxite imports totaled 141.38 million tons, and total supply was 206.89 million tons.
According to theoretical calculation, ore supply gap is 4.62 million tons. Since the total amount of imported ore exceeds the theoretical demand by about 1.01 million tons and domestic ore production is about 5.62 million tons lower than the theoretical demand, the ore supply gap may exceed 5 million tons. For 2023, imported ore is basically in a tight balance and there is no obvious oversupply. This is mainly due to the production suspension of some bauxite mines in Shanxi and Henan and the decline in domestic ore production, resulting in a relatively obvious gap in ore supply.
Overall, China's alumina production is showing a growth trend. According to SMM, China's alumina production is expected to reach 82.73 million tons in 2024, up 3.63% YoY. The demand for bauxite is also expected to increase, coupled with the decrease in China's bauxite reserves and the decline in grade, domestic ore production is difficult to meet demand. Some companies chose to purchase imported ore to supplement, and imported ore consumption is higher than domestic ore. From this perspective, the demand for bauxite will also increase.
On the supply, there are currently no signs of relaxation in domestic strict safety and environmental protection policies, coupled with the decrease in China’s bauxite reserves and declining grades. In the long term, domestic bauxite production is expected to decline, and bauxite supply may increase. More contributions come from imported minerals.
In terms of imported bauxite, China currently imports about 95% of the total bauxite from Guinea and Australia. In terms of non-mainstream ores, due to freight disadvantages and ore mining being less convenient than in Guinea, it may be difficult to increase bauxite in large quantities in the short term to meet domestic demand, and the increase in imported ore is still mainly contributed by Guinea and Australia.
The increase in Australian bauxite in 2024 is expected to be about 1 million to 2 million tons; in terms of Guinea bauxite, Guinea oil depot explosion has affected some new projects or new production. It is currently expected that Guinea's bauxite imports will increase by about 10 million tons in 2024.
SMM brief review
At present, it is difficult for bauxite supply to grow explosively in 2024, and it is difficult for the bauxite market to turn into oversupply. If no major accidents occur, bauxite may show a tight balance in market.
