crazy but will get crazier

Bauxite imports – crazy but will get crazier
Posted on Apr 29, 2015Written by June Wang


Imported bauxite volumes to China increased substantially in March to 4 million tonnes, up 47% m/m and 144% y/y. However, prices continued to fall. In March, the average price dropped to $55/t from $56/t last month, and down from $59/t at the beginning of 2015.

Nonetheless, transaction volumes still reached a new height.



As the chart shows, volumes of bauxite from Malaysia, Australia and others all presented an increase to different degree, but especially Malaysia.

In March, Malaysia shipped 1.5Mt, doubling compared with the previous month and accounting for 33% of monthly total volumes, beaten only by Australia. Malaysia as stepped into the gap created by the export ban imposed by Indonesia in January last year. The downside for Malaysian material is that it is poorer quality, with some estimates putting it at a 40% discount to Indonesian material.

We expect April’s number from Malaysia to climb further, based on loading data, and we are hearing reports that volumes will eventually reach as much as 1.8 million tonnes per month.

Australia shipped out 1.9Mt to China in March, dominating the imported market and accounting for 42% of monthly total imports, with an increase of 17% month on month. However, the average price slipped to $57/t in March. Such fluctuations on price were mainly caused by the weaken demand of domestic alumina market. In addition, the price of India exports also dropped a little, with relatively stable volumes.

Overall, imported bauxite to China are in a rapidly widening channel. Consumption rates are rising, but the amount of material in port inventory remained at a worrisome level.