Bauxite Prices Fall Again, Alumina Turns from Loss to Profit [SMM Bauxite Weekly Review]

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SMM News on May 15:

Domestic bauxite market:

This week, the price of domestic bauxite in Guizhou fell by 30 yuan/mt, mainly due to alumina refineries driving down prices when purchasing bauxite.

As of today, in Shanxi, the transaction price of bauxite with an Al/Si ratio of 5.0 and 60% alumina content, excluding VAT, for self pick-up at the crushing plant, was approximately 580-620 yuan/mt. In Henan, the transaction price for bauxite with the same specifications was around 550-590 yuan/mt. In Guizhou, the transaction price for bauxite with an Al/Si ratio of 5.5 and 58% alumina content was 410-450 yuan/mt. In Guangxi, the transaction price for bauxite with an Al/Si ratio of 6.0 and 53% alumina content was 320-335 yuan/mt.

Imported bauxite market:

According to data from May 9, the total weekly bauxite arrivals at domestic ports were 4.2227 million mt, a decrease of 670,100 mt from the previous week. The total weekly bauxite port departures from main ports in Guinea were 3.6292 million mt, a decrease of 187,100 mt from the previous week. The total weekly bauxite port departures from main ports in Australia were 852,900 mt, a decrease of 86,500 mt from the previous week.

In terms of prices, the SMM CIF index for imported bauxite fell by $7.57/mt WoW to $70.41/mt on Thursday this week, mainly due to the inquiry of some Guinea bauxite transactions in the bulk cargo market, with transaction prices falling to around $70/mt. This week, the CIF price of Guinea bauxite fell by $6/mt WoW to $70/mt. The price of Australian low-temperature bauxite fell by $10/mt to $70/mt, and the price of Australian high-temperature bauxite fell by $7/mt to $65/mt.

SMM Commentary: With the further decline in bauxite prices and the rebound in alumina prices, the loss pressure on alumina refineries has further decreased. As of May 15, according to SMM's daily cost-profit model, the theoretical profit of alumina was 119 yuan/mt. With prices falling to $70/mt, the sentiment of sellers to stand firm on quotes is expected to strengthen. As the profitability of alumina improves, the operating enthusiasm of alumina refineries is expected to rebound, and the resistance to further driving down ore prices is expected to increase. However, from a fundamental perspective, the supply of imported bauxite remains at a high level, and the bauxite market is expected to maintain a surplus pattern in the short term, with prices still facing downward pressure. In the short term, bauxite prices may turn volatile. Subsequent attention should be paid to the shipping situation of Guinea bauxite.

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