Bosai Group acquires 51% share of Qixing alumina refinery

By IM Staff
Published: Thursday, 20 December 2018

Bosai has made a $1.2 billion acquisition of Shandong Qixing's idled operation, however this is not expected to ease the tightness in the Chinese alumina market with production not due until the first quarter of 2019.

Chinese mining company Bosai Group has acquired 51% of Shandong Qixing Group’s alumina refinery for 1.2 billion yuan ($1.73 million), although the market does not expect any immediate relief to Chinese domestic alumina supply tightness, Fastmarkets understands.

The Qixing refinery has capacity of 500,000 tonnes per year of alumina but it has been idle for over a year due to financial issues.

The remaining 49% of the alumina refinery will remain in the possession of Qixing but Bosai will now have the majority shareholding.

"Bosai Group has concluded the acquisition of 51% of Qixing’s shares," a source close to the matter told Fastmarkets on Wednesday November 7.

Bosai did not respond to Fastmarkets’ request for comment.

The acquisition is not expected to have an effect on alumina prices in the short term because the refinery will not restart production until January 2019, with output coming online within the first quarter of next year. This means relief to the Chinese alumina market's tightness will not be felt by the market for some time.

Fastmarkets assessed the Chinese alumina price at 3,150- 3,200 yuan per tonne on Thursday November 8, up from 3,000-3,100 yuan on October 11 when major alumina producers reported that falling grades of domestic bauxite was having an adverse effect on output.

"Spot alumina in China is now tight after several big producers claimed to have cut output due to the downgrade of bauxite," a trader in China said. "Although Bosai as well as other producers launched new alumina projects, the output will come to the market next year so it can’t relieve the current shortage of material."

The company is also planning to upgrade Qixing’s equipment and expand its capacity to 1.4 million tpy, a project that is estimated to finish at the end of 2019, Fastmarkets understands.

Bosai Group is involved in several businesses including bauxite, coal, ferro-alloys and alumina both in China and overseas, with its main focus on mining.