Alumina Refinery Engages in Bargain Down Purchasing Prices of Bauxite, Bauxite Prices Fall Further [[SMM Bauxite Weekly Review]]

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SMM News on May 8:

Domestic bauxite:

This week, the price of domestic bauxite in Shanxi fell by 20 yuan/mt. Although the cost of producing alumina using imported bauxite is higher than that of domestic bauxite, the proportion of domestic bauxite used by alumina refineries in Shanxi and Henan has increased, and there is no surplus of domestic bauxite. However, alumina refineries in Shanxi and Henan are under significant pressure from losses and are driving down prices when purchasing bauxite raw materials, leading to a slight drop in the price of domestic bauxite in Shanxi.

As of today, the price of bauxite with an Al/Si ratio of 5.0 and 60% alumina content in Shanxi, excluding VAT, for self pick-up at the crushing plant, is approximately 580-620 yuan/mt. In Henan, the price for bauxite with the same specifications is around 550-590 yuan/mt. In Guizhou, bauxite with an Al/Si ratio of 5.5 and 58% alumina content is priced at 440-480 yuan/mt, excluding VAT, for self pick-up at the crushing plant. In Guangxi, bauxite with an Al/Si ratio of 6.0 and 53% alumina content is priced at 320-335 yuan/mt, excluding VAT, for self pick-up at the crushing plant.

Imported bauxite:

According to data from May 2, the total weekly port arrivals of bauxite at domestic ports were 4.8928 million mt, an increase of 31,600 mt from the previous week. The total weekly port departures of bauxite from main ports in Guinea were 3.8163 million mt, a decrease of 1,800 mt from the previous week. The total weekly port departures of bauxite from main ports in Australia were 939,400 mt, an increase of 550,200 mt from the previous week.

In terms of prices, the SMM CIF index for imported bauxite fell by $0.58/mt from last Wednesday to $77.98/mt this Thursday. Although no new spot bauxite transactions were inquired after the holiday, a few suppliers offered low prices in the spot market. Meanwhile, the intended purchase prices of bauxite by alumina refineries have decreased compared to the previous period, with some individual intended prices below $70/mt. In addition, the CIF price of Guinea bauxite this week was lowered by $1/mt from last Wednesday to $76/mt.

Overall, as bauxite prices fall, the pressure of losses on alumina refineries has eased, but a significant amount of alumina capacity is still operating at a loss, and the intention to drive down bauxite purchase prices remains firm. Moreover, news emerged this week that the long-term contract prices for some Guinea bauxite in Q2 have been reduced. In the spot market, both seller quotes and buyer intended prices have decreased. In summary, bauxite prices are expected to continue to decline in the short term.

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