Bauxite to Aluminium |
China – Reliance on importsUntil recently, tightness in bauxite supply has steadily increased from 2006 corresponding with the commissioning of a large amount of alumina refining capacity in China using primarily Bayer production technology. These refineries are predominately located in Shandong province and rely on imported gibbsitic bauxite. Figure 4 highlights Chinese import requirements. The shift in global demand for internationally traded bauxite directed to China (previously dominated by trade to the United States and Europe) requires rapidly expanding exports from regional neighbours to fill the shortfall; domestic Chinese bauxite is of an inferior quality and insufficient to meet refining requirements on a sustainable basis. Going forward, recently announced changes in Chinese Central Government policy aim to phase out small-scale operations and place greater emphasis on securing bauxite from international sources. Chinese provincial governments are moving to enhance industrial concentration, closing “illegal” bauxite mines, or consolidating small-scale operations through the increase of resource taxes and environmental protection regulations. Notwithstanding the recent slow down in economic activity, any demand for bauxite, particularly from China, will necessitate a continued supply of reliable internationally-sourced bauxite imports. However, with the Indonesian government enforcing spot inspections on minerals exports (as of July 2008) in an attempt to continue to clamp down on illegal trade, and Indian companies’ moving to increase vertical integration in the country, the future of sufficient bauxite supply to meet China’s growing demand remains an open question. Chinese Bauxite Imports and Suppliers
Source: Various Government Agencies & AME Estimates According to Chinese Customs data, China imported 23.26Mt of bauxite in 2007, up approximately 140% year on year. The August 2007 import figure of 3.02Mt represents an all-time high and despite some inevitable monthly volatility, the most recent Chinese Customs import data available at the time of writing indicates approximately 18Mt of imported bauxite in the first eight months of 2008 with 2.6Mt imported in August 2008. China overtook the United States as the world’s largest importer of bauxite in the latter part of 2006 and will increasingly dominate international bauxite trade particularly as North American alumina production will continue to ease. Indonesia continues to provide the overwhelming bulk (approx. 65%) of imports to China, with the balance coming primarily from India and Australia. The availability of the raw material and distance to refineries will provide a further challenge to capacity growth as inland freight as well as sea freight imposts will hit the higher cost Chinese refineries hard. By mid 2008, average bauxite to alumina ratios for bauxite imported to China from Indonesia had deteriorated to 2.8-2.9:1 from 2.5-2.6:1 indicating more Indonesian bauxite is required to produce the same amount of alumina. Estimated Chinese Bauxite Imports
Source: Various Government Agencies & AME Estimates Back to top |
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