good outlook - 5,5 cent a joke for MMI

for me, 5,5 cent is a joke



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ALUMINA LIMITED HALF-YEAR ENDED 30 JUNE 2015 Supplementary

Market Outlook

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China is expected to import around 45 million tonnes of bauxite in 2015. This is forecast by CM Group to grow to a potential 104 million tonnes by 2025. This forecast is based on the expected on-going new and expanded capacity using imported bauxite and the forecast conversion of refineries in Henan and Shanxi provinces to imported bauxite, as the consumption of domestic bauxite peaks in 2019, then declines as the quality in these key provinces begins to fall.

China imported 22.7 million tonnes of bauxite in the first six months of 2015. A key supplier to China has been Malaysia, which has exported at least 2 million tonnes per month since March 2015 at prices lower than the previous average price. Malaysian and other sources have filled the shortfall created when Indonesia imposed a bauxite ban in January 2014. Over 2014, following the Indonesian export ban, the imported bauxite price (landed in China), for a variety of different qualities and sources, ranged from approximately $48 per tonne to $90 per tonne. When estimated on a value-in-use basis, the imported bauxite price into China is currently approximately $54 per tonne, compared with an average of $68 per tonne over 2014.

There are question marks over how long and at what cost and volume bauxite can continue to be mined and exported from Malaysia. Australia continues to be a significant supplier of bauxite to China, as does India. Some new shipments have commenced to China from Guinea. Increasing volumes of bauxite are likely to be required by China. Constraints on current sources and the cost and location of new developments are likely to have an upward pressure on world bauxite prices, particularly as Chinese stockpiles deplete. Due to larger than expected import volumes into China, CM Group estimates that bauxite stockpiled in China were approximately 24 million tonnes at the end of the first half. However, the stockpiles are expected to be depleted at a faster rate, given re-starts of curtailed alumina capacity in Shandong and capacity expansions expected.