Are booming bauxite prices here to stay?Australian bauxite...

Are booming bauxite prices here to stay?

• Australian bauxite prices have jumped to US$95 per DMT due to supply issues and strong Chinese demand
• A handful of ASX stocks have benefitted from the price increase
• But will prices maintain their momentum through 2025?

Experts believe bauxite, the raw material required for producing aluminium, is gearing up for another record year following the suspension of exports out of Guinea last year.

The 2024 price rally had been brewing all year due to several global disruptions, but the straw that broke the camel’s back came when Guinea blocked bauxite exports by Emirates Global Aluminium, one of the world’s leading aluminium producers accounting for 4% of global supply.

As the second-largest global bauxite producer, the importance of Guinea’s bauxite production cannot be overstated. The nation mined around 87.9Mt in 2023, positioning itself just behind Australia in production volume.

Along with the supply crunch, China’s aluminium smelters have become increasingly reliant on imported bauxite to feed their operations with much of the demand being met by Guinea.

As a result, bauxite prices surpassed the value of a tonne of iron ore for the first time last year.

Guinea bauxite prices have risen to US$120 per DMT, a 74% increase since January 2023 while Australian prices have jumped to US$95 per DMT, reflecting a 104% surge over the same period.

While bauxite and alumina producers on the ASX are few and far between, a handful of stocks have benefitted from last year’s surprise turn in the market.

High bauxite prices mean greater market dynamics

Higher commodity prices generally provide companies with greater potential to raise funds for drilling and exploration activities, leading to a healthy wave of market action including M&A deals and strategic partnerships/joint ventures.




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