The impact of Guinea's rainy season intensifies, with imported bauxite index prices fluctuating [SMM Bauxite Weekly Review]

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SMM News on June 26:

Domestic bauxite:

The domestic bauxite market remained quiet this week, with stable operations prevailing.

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

Imported bauxite:

According to data from June 20, the total weekly port departures of bauxite at domestic ports were 4.2009 million mt, a decrease of 38,000 mt from the previous week; the total weekly port departures of bauxite at main ports in Guinea were 3.0638 million mt, a decrease of 1.0108 million mt from the previous week; the total weekly port departures of bauxite at main ports in Australia were 1.3243 million mt, an increase of 286,900 mt from the previous week. The rainy season in Guinea typically lasts from May to November, with July-August being the most affected period. As we enter late June, the impact of the rainy season on shipments from Guinea is expected to gradually become evident.

In terms of prices, the spot cargo transactions of imported bauxite were sluggish this week, with prices fluctuating. Recently, no new transaction prices for imported bauxite have emerged. However, with the announcement of long-term contract prices for Q3 by some overseas miners, the quotes from suppliers and the intended prices from bauxite buyers have both decreased. In Guinea, it is expected that the long-term contract prices for Q3 will not change significantly compared to Q2. Coupled with the gradual impact of the rainy season, there are initial signs of a decrease in port departures of bauxite from Guinea, and the prices of imported bauxite from Guinea have only dropped back slightly. Meanwhile, due to the seasonal impact of the rainy season in Guinea, domestic alumina refineries have anticipated this and it is expected not to affect their production. In the short term, the fundamental situation of bauxite is expected to remain in surplus, with alumina refineries generally having limited intentions to purchase bauxite at high prices.

Overall, bauxite prices have fluctuated, and the subsequent price trend still awaits directional guidance. As of Thursday this week, the CIF price of bauxite from Guinea was reported at $74/mt, a decrease of $0.5/mt from last Thursday; the SMM imported bauxite index was reported at $74.3/mt, a decrease of $0.13/mt from last Thursday.

SMM Commentary:

This week, the actual transaction price of alumina fell sharply, compressing the profit margins of alumina enterprises and stimulating the desire of some domestic ore buyers to bargain down prices. In the short term, domestic ore prices may fluctuate, and continuous attention should be paid to price changes. Regarding imported ore, with the announcement of long-term contract prices for Q3 by some overseas miners, both supplier offers and buyer intention prices for bauxite have decreased. For the subsequent price trend, continuous attention should be paid to the impact of the rainy season in Guinea, the shipping situation of Australian bauxite, and changes in the operating capacity of downstream alumina enterprises.

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