The Impact of Australia's Rainy Season Gradually Emerges, Alumina Prices Accelerate Pullback, Ore Prices Face Pressure at the Peak [SMM Bauxite Weekly Review]

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SMM January 16 News:

Domestic Bauxite:

This week, the domestic bauxite market saw no significant changes, with prices remaining stable at high levels.

As of today, the self pick-up transaction price (excluding VAT) for bauxite with an Al/Si ratio of 5.0 and alumina content of 60% is approximately 640-680 yuan/mt in Shanxi, 580-620 yuan/mt in Henan, 510-550 yuan/mt in Guizhou (Al/Si ratio 5.5, alumina content 58%), and 320-335 yuan/mt in Guangxi (Al/Si ratio 6.0, alumina content 53%).

Imported Bauxite:

According to data from January 10, the total weekly port arrivals of bauxite at domestic ports were 4.2288 million mt, down by 139,400 mt from the previous week. The total weekly port departures of bauxite from Guinean main ports were 2.3339 million mt, down by 1.2899 million mt from the previous week, while Australian main ports recorded total weekly port departures of 861,400 mt, an increase of 263,500 mt from the previous week.

With the rainy season gradually arriving in Australia, the impact on bauxite supply is increasing. Over the past two weeks, the average weekly port departures of bauxite from Australian ports were 710,000 mt, down from the average weekly shipments of 940,000 mt in December by 230,000 mt/week and from the average weekly shipments of 1.07 million mt in November by 360,000 mt/week. It is expected that China's bauxite imports from Australia in January will decrease.

SMM Brief Comment: Recently, spot alumina prices have been accelerating their decline. On Thursday this week, 5,000 mt of spot alumina was transacted in north-west China, with the transaction price corresponding to an ex-factory price of approximately 3,800 yuan/mt in Shanxi. This price roughly aligns with the cash cost of producing alumina in Shanxi and Henan using Guinean ore priced at $100/mt. Alumina refineries have significantly reduced their willingness to accept high-priced bauxite, leading to a decline in supplier quotations. However, no new bulk transactions for bauxite have been observed yet, as the bauxite upstream and downstream sectors remain in a standoff.

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