SMM: Alumina profit margins narrow significantly; bauxite prices face pressure at the top

Recently, no new transaction prices have been observed for imported bauxite from Guinea, as buyers and sellers remain in a standoff. However, both supplier quotations and the intended prices from bauxite buyers have shown a decline, suggesting that the price of imported bauxite from Guinea may experience a certain degree of pullback. The supply fundamentals of domestic bauxite remain relatively tight, providing some price support. However, the significant drop in alumina transaction prices has still stimulated the desire of some domestic ore buyers to bargain down prices. In the short term, domestic ore prices may exhibit volatile movements, and further developments need to be closely monitored.

Image source: https://en.wikipedia.org/wiki/Bauxite

Domestic bauxite

This week, the domestic bauxite market saw no significant changes, with prices fluctuating at highs. However, domestic spot alumina prices dropped sharply, significantly narrowing alumina profit margins. Buyers of domestic bauxite in north China showed a slight desire to bargain down prices, but the supply and demand fundamentals for domestic bauxite in the region remained tight. Currently, no significant price declines for domestic bauxite have been observed, and SMM will continue to monitor the situation.

As of today, the transaction prices for bauxite with an Al/Si ratio of 5.0 and alumina content of 60 per cent (excluding VAT, self pick-up at crushing plants) were approximately RMB 640-680 per tonne in Shanxi, RMB 580-620 per tonne in Henan, RMB 510-550 per tonne in Guizhou (Al/Si ratio 5.5, alumina content 58 per cent), and RMB 320-335 per tonne in Guangxi (Al/Si ratio 6.0, alumina content 53 per cent).

Imported bauxite

According to data from January 17, the weekly port arrivals of bauxite at domestic ports totalled 2.69 million tonnes, down 1.54 million tonnes from the previous week. Weekly port departures of bauxite from Guinea's main ports totalled 3.88 million tonnes, up 1.55 million tonnes from the previous week, while weekly port departures from Australia's main ports totalled 900,000 tonnes, up 40,000 tonnes from the previous week.

In December 2024, China's bauxite imports returned to high levels, with total imports reaching 14.98 million tonnes, up 21.9 per cent M-o-M. This was mainly due to the end of the rainy season in Guinea, while non-mainstream bauxite imports for the month reached 1.2 million tonnes, marking a five-year high. Moving forward, the impact of the rainy season in Australia is expected to reduce China's bauxite imports from Australia, but increased shipments from Guinea are anticipated. China's total bauxite imports are expected to remain stable with a slight increase.

Source: SMM