The impact of Guinea's rainy season is becoming increasingly evident, but ore prices have dropped back slightly under the pressure of high inventory and low alumina profitability [SMM Bauxite Weekly Review]

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SMM News on July 17:

Domestic bauxite market:

This week, the domestic bauxite market remained calm, with stable operations prevailing. There was no surplus in the domestic bauxite supply, and some clients reported that a price drop was unlikely in the short term.

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

Imported bauxite market:

According to data from July 11, the total weekly port arrivals of bauxite at domestic ports were 4.2049 million mt, an increase of 87,400 mt from the previous week; the total weekly port departures of bauxite from main ports in Guinea were 2.937 million mt, an increase of 358,900 mt from the previous week; the total weekly port departures of bauxite from main ports in Australia were 1.1483 million mt, a decrease of 231,800 mt from the previous week. It is understood that the impact of the rainy season in Guinea is becoming more pronounced, with a significant decline in the weekly average port departures of bauxite since the end of June. Considering shipping time, it is expected that the impact of the rainy season in Guinea will be reflected in the port arrival data at domestic ports starting from August.

In terms of prices, the bulk cargo transactions of imported bauxite remained sluggish this week. However, some market participants reported that it was relatively difficult to close deals for Guinea bauxite at prices above $73/mt, with prices generally in the doldrums. As of Thursday this week, the CIF price of Guinea bauxite was reported at $73/mt, a decrease of $1/mt from Thursday last week; the SMM imported bauxite index was reported at $73.37/mt, a decrease of $0.95/mt from Thursday last week.

SMM Comment:In the short term, the domestic bauxite supply is limited, with no surplus, and prices are expected to remain stable. Imported bauxite is facing pressure from high inventory and low alumina profitability, with short-term prices expected to be in the doldrums. The subsequent price trend will require continuous monitoring of the impact of the rainy season in Guinea, the operating capacity of alumina, and the profitability of alumina.

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