Looking back at the global bauxite market in 2019
Global bauxite production in 2019 is increasing, mainly due to the expansion of mining projects and the emergence of new projects. For example, the United Arab Emirates Global Aluminum (EGA) established the first bauxite project in Guinea, Rio Tinto ) Amrun bauxite project put into operation and Australian Bauxite Limited's start at the Bald mine project, which led to oversupply of bauxite and low prices. At the same time, China ’s domestic bauxite demand and consumption have slowed down, and bauxite prices have shown a downward trend throughout the year.
The following is an overview of the 2019 bauxite market, projects and output from the perspective of the price trend throughout the year.
Looking at 2019, China's bauxite prices continue to fall, hovering between 570 yuan / ton to 540 yuan / ton as a whole. As of June 30, the price of bauxite fell from 570 yuan / ton to 540 yuan / ton within a few months, after which the price began to rise slightly to 560 yuan / ton on December 29.
At the same time, there is an excess supply of overseas ore, and the annual price of bauxite is as low as US $ 45.93 / ton to US $ 43 / ton.
On the one hand, EGA recently signed an agreement to supply bauxite from China's Xinfa Group within the next five years. Starting from 2020, millions of tons of bauxite will be supplied each year, and the first ship is scheduled to be loaded in January. EGA Guinea Alumina Corporation (GAC) is expected to mine 12 million tons of bauxite annually.
On the other hand, Metro Mining increased production after the end of the Australian rainy season from November 2018 to April 2019. Metro Mining's main goal in 2019 is to meet the growing demand of China's bauxite, which is expected to increase from 82 million tons last year to 90 million tons. The company also signed a supply contract with Chinalco Group to deliver 420,000 wet tons of bauxite to it in the second half of 2019. As of December 23, Metro Mining has completed its annual bauxite production target of 3.5 million wet tons.
According to market research reports, it is estimated that Australia's bauxite output will be 117.3 million tons in 2019 ~ 2020, and the output of 2014-15 will be 80.3 million tons.
BMI research report also predicts that India's bauxite output will show an upward trend. By 2021, India's ore production will increase from 22.08 million tons in 2016 to 49.4 million tons, with an average annual growth rate of 17.5%. The report said the increase was due to a five-fold increase in mining lease area in Orissa.
Recent news revealed that India's National Aluminum (NALCO) is planning to start its Pottangi bauxite project in 2023 to extend the operating life of the alumina refining and aluminum smelting business. The mine will serve Damanjodi's fifth alumina refinery, which is currently being expanded. Nalco's Pottangi mine and Panchpatmalli mine have a total of about 160 million tons of reserves, which will provide sufficient bauxite for the company's smelters within 25-30 years.
On December 17, NALCO held a public hearing on environmental issues in the Pottangi bauxite mining area. Villagers around Pottangi attended the meeting. Villagers expressed support for NALCO's mining and development activities. It is reported that the Pottangi mine has a bauxite production capacity of 3.5 million tons per year. In 2019, NALCO bauxite mine was awarded the Golden Peacock Environmental Management Award for its excellent environmental management.
Rusal's bauxite output in the third quarter was 3.948 million tons, which was 6.9% lower than the 4.242 million tons in the second quarter. In the first nine months of this year, Rusal produced 12.021 million tons of bauxite, compared with 10.128 million tons in the same period last year, a year-on-year increase of 18.7%.
Rio Tinto's bauxite output in the third quarter was 13.79 million tons, a year-on-year increase of 9% and a month-on-month increase of 3%.
Guinea has been a major exporter of bauxite for many years, and this year is no exception. According to global trade data, the country's bauxite exports in 2019 are expected to reach 64 million tons, the export volume in 2018 is about 56 million tons, and the revenue is 622 million US dollars. At the beginning of the year, EGA's first bauxite train transported ore from its subsidiary Guinea Alumina Co. (GAC) to the port, with a transport volume of about 6,800 tons of bauxite.
In the first half of 2019, Guinea exported 27.6 million tons of bauxite to China, accounting for 52.5% of China's total bauxite imports, an increase of 36.6% over the previous year's 20.20 million tons. The price of Kamsar for bauxite is $ 37.20 per dry ton.
Ukraine is another major bauxite export destination in Guinea. It is expected that Ukraine will import 3.9 million tons of bauxite from Guinea this year, a year-on-year increase of 5.4%. Its annual total bauxite imports are expected to reach 5.5 million tons, with a cost of US $ 226 million, a year-on-year increase of 9.17%.
Apart from Guinea, Australia and Indonesia are also major sources of bauxite imports for China. In November, Australia exported 3.28 million tons of bauxite and 3.5 million tons in October. In August, Australia exported 3.63 million tons of bauxite to China.
Indonesia exported 1.5 million tons of bauxite to China in November, 1.08 million tons in October, and 1.13 million tons and 1.12 million tons in August and September, respectively.
In the first half of the year, China imported 56.63 million tons of bauxite from Guinea, Australia and Indonesia, accounting for 93.7% of total bauxite imports, an increase of 39.26% year-on-year.
From the second half of the year to November, China imported a total of 29.48 million tons of bauxite.
Compared with the first half of the year, the volume of imports showed a downward trend. According to Chinese customs data, following the continued decline of bauxite in August, September, and October, bauxite imports in November were 7.12 million tons, a month-on-month increase of 11.38% and a year-on-year increase of 21.9%.
The import volume of bauxite in the United States in the second quarter of 2019 was 1.03 million tons, an increase of 38% from the first quarter of 2019, and an increase of 13% from the same period last year. This brings the total bauxite imports in the United States to 1.77 million tons in the first half of 2019.
If the downward trend of China's bauxite imports in 2020 persists, domestic ore demand and use may increase, and prices will rise. China Aluminum Industry is using Guizhou Province as a bauxite mine. Central Henan Province and northern Shanxi Province have closed a large number of mines due to environmental reforms. Guizhou Province has 162 million tons of bauxite reserves, accounting for about 18% of the country's total bauxite reserves, second only to Shanxi, Henan and Guangxi.
Globally, Australia will drive growth in the global bauxite sector, and the country currently has 12 of 29 new bauxite projects. Rio Tinto's $ 2.6 billion Amrun project in Queensland will further strengthen Australia's position as the world's largest bauxite producer.
Guinea's number of new projects is close behind, and the country has seven new bauxite projects, which are expected to increase bauxite output to 82.3 million tons by 2028 and 59 million tons in 2018.
Indonesia is expected to increase bauxite production at an average annual growth rate of 8.1% during 2019-2028. By 2029, the output of bauxite is expected to reach 11.6 million tons, and the output of bauxite in 2019 is estimated at about 6.5 million tons.