Bauxite & Alumina ’17: Australian bauxite and alumina to expand reach into China as demand grows

By Davide Ghilotti
Published: Monday, 03 April 2017

China needs more foreign alumina and bauxite; Market favours Australian exporters; Chinese imports predicted to double

Australia will strengthen its leading position as supplier of alumina and bauxite to China in the coming years, delegates heard at the 23rd Bauxite and Alumina conference in Miami, held in March.

According to Andrew Wood, group executive for strategy and development at Alumina Ltd, while China has historically been highly reliant on internal alumina supply, some volumes of foreign-produced alumina are being imported into the country.

Just over half (56%) of all alumina imports into China were shipped from Australia in 2016, Wood told delegates during a presentation, adding that China’s reliance on Australia is expected to increase.

The logistical access into China for Australian material, coupled with Australia’s own high capacity, will be drivers of this trend, he said. Similar increases are also forecast for bauxite.

Wood predicted that Chinese imports of bauxite will double in the coming decade, from 52m tpa to 120m tpa by 2025, with Australia likely to feature increasingly in bauxite exports to China.

He cited driving factors including growing demand for the mineral in the long term from local metallurgical markets (as well as non-met industries), together with a declining availability of domestic resources, which is forcing Chinese companies to increase their reliance on foreign material.

The latest trade data for the fourth quarter of 2016 showed that Australia held its role as top supplier of bauxite to China.

As inflow of material increases, the new import-based scenario may eventually force companies that are based inland to move operations to locations with better access to sea ports, Wood added.

"In our view, many Henan and Shanxi refineries will relocate closer to the coast to be able to handle better imports of bauxite from outside," he said.