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SMM reported on July 3:
Domestic bauxite:
The domestic bauxite market remained quiet this week, with stable operations prevailing. Alumina prices followed a downward trend in June, and alumina refineries had intentions to bargain down purchasing prices of bauxite. However, as of early July, no price adjustments for domestic bauxite had been observed.
As of today, the self pick-up price (excluding VAT) at the crushing plant for bauxite with an Al/Si ratio of 5.0 and 60% alumina content in Shanxi is approximately 580-620 yuan/mt; in Henan, the price for bauxite with the same specifications is around 550-590 yuan/mt; in Guizhou, for bauxite with an Al/Si ratio of 5.5 and 58% alumina content, the price is approximately 410-450 yuan/mt; and in Guangxi, for bauxite with an Al/Si ratio of 6.0 and 53% alumina content, the price is around 320-335 yuan/mt.
Imported bauxite:
According to data from June 27, the total weekly port arrivals of bauxite at domestic ports were 4.8992 million mt, an increase of 698,300 mt from the previous week; the total weekly port departures of bauxite from main ports in Guinea were 2.5635 million mt, a decrease of 500,300 mt from the previous week; and the total weekly port departures of bauxite from main ports in Australia were 1.0797 million mt, a decrease of 244,600 mt from the previous week.
During the week, media reported that Bouna Sylla, Guinea's Minister of Mines and Geology, announced a series of "bold" reform measures targeting the country's mining industry. He pledged to lead the industry into a more transparent era and utilize national resources more effectively. Relevant measures include:
(1) Establishing the Guinea Bauxite Index (GBX), which will be operational in the coming months to ensure a more fair and transparent pricing process and aims to strengthen the relationship between mining companies and tax authorities, thereby increasing national revenue.
(2) The Guinean government plans to fully exercise its sales and transportation rights in accordance with the mining law and existing agreements, and has established the Guinean Maritime Transport Company (GUITRAM) to be responsible for exercising transportation rights. "According to the mining law and relevant agreements, the state has the right to sell 15% of each company's production." "Under the new policy, 50% of the produced bauxite must be transported by vessels flying the Guinean flag or vessels with similar attributes."
According to SMM, these measures have not yet had a substantial impact on the bauxite market, and the specific impact needs to be tracked based on subsequent actual implementation. If relevant measures are strictly enforced, market expectations may increase the cost of bauxite or push up bauxite prices.
In terms of prices, this week's bulk bauxite import transactions remained sluggish, with prices generally holding steady. However, frequent policy announcements related to Guinea's bauxite, combined with the anticipated impact of the rainy season, have given some bauxite sellers confidence to refuse to budge on prices, leading to a slight rebound in the SMM CIF index for imported bauxite in the latter part of this week. As of Thursday this week, the CIF price of Guinea's bauxite was reported at $74/mt, unchanged from Thursday last week; the SMM imported bauxite index was reported at $74.3/mt, also unchanged from Thursday last week.
SMM Commentary: The weekly port departures from Guinea's main bauxite ports have declined for two consecutive weeks, and the impact of the rainy season and previous mining rights incidents is expected to gradually become apparent. However, bauxite inventory remains high, and supply is expected to remain relatively loose in the short term. In the short term, buyers and sellers in the bauxite market are expected to continue their negotiations, with prices expected to fluctuate rangebound. For the subsequent price trend, continuous attention should be paid to the impact of the rainy season in Guinea and changes in the operating capacity of downstream alumina.
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