China’s Bauxite Imports Plummeted 2.56 Million mt MoM in June

SHANGHAI, Aug 1 (SMM) - Customs data showed that China imported 9.42 million mt of bauxite in June, down 21.4% MoM and 7.1% YoY. The figure was down a staggering 2.56 million mt from that in May and failed to sustain the monthly imports above 10 million mt recorded in previous months. Imports from Australia were 2.44 million mt, down 21.19% month-on-month and 23.14% year-on-year; imports from Guinea were 5.75 million mt, a decrease of 17.16% month-on-month, but up 9.05% year-on-year; imports from Indonesia were 1.05 million mt, a drop of 40% MoM and 35.8% YoY; imports from Montenegro, Malaysia and Jamaica were 99,400 mt, 36,300 mt and 44,500 mt respectively. China imported a merely 0.04 mt of bauxite from Ghana and 0.02 mt from Cameroon.
Imports from Australia
As the hurricane in Australia disrupted both mining and transportation in June, local mining companies focused on the delivery of long-term orders. Since Australia suffered no extreme weather in July, the production and shipments are expected to have returned to normal.
Imports from Indonesia
Market concerns about a potential export ban by Indonesia have intensified. Most mines in Indonesia have basically run out of their export quotas since June. The shipments under long-term orders have already been shocked, and there has been virtually no spot bauxite available for shipments. Chinese alumina refineries who use Indonesian ore are now seeking Guinean and Australian ore as alternatives. The market is pessimistic that Indonesia may begin to prohibit the exports of bauxite at the end of the year. Although the Chinese alumina industry will not suffer an irreparable trauma if the export ban comes into force, the instability of alumina production will be heightened.  
Imports from Guinea
The rainy season in Guinea falls from May to November, while the dry season begins in December and ends in April. The decline in bauxite imports from Guinea was partly due to the rainy season, which lowered its bauxite output. In addition, the demand for Guinean ore softened slightly after most Chinese alumina refineries who use Guinean ore have stockpiled ore that could sustain 1-3 months of production. Bauxite shipments from Guinea kept refreshing record high in the first half of the year. However, China’s demand for Guinean ore will regain upward momentum after the current stockpiles run out over time. SMM believes that China’s bauxite imports from Guinea will recover after the rainy season in Guinea ends. It is worth noting that the unstable regime and frequent strikes in Guinea will be important factors affecting the mining and shipment of Guinean ore in the future.
On the whole, the decline in bauxite exports from Guinea and Australia in June was caused by bad weather, rather than policy restrictions. SMM predicts that China’s bauxite imports from Australia may have picked up in July along with the recovery of output in the country while imports from Guinea may have continued to fall due to the rainy season. In view of the enormous uncertainty as for when Indonesia will impose a ban on its bauxite exports, it is vital for Chinese alumina refineries to take countermeasures in advance so as to minimise the negative impact.