Market prices for refractory grade bauxite, and for brown
fused (BFA) and white fused alumina (WFA), have mostly remained
stable in the two weeks to Friday February 7, while Chinese
operations have remained closed, although several sources have
pointed to shipping delays as a bullish factor for prices in
the near future.
Production operations in China’s Shanxi and
Henan provinces have been closed during the past week, and were
expected to stay shut until February 17, local sources
This was intended to minimize travel between the various
parts of the East Asian country and contain the spread of the
viral infection, which has so far affected more than 30,000
people in China alone. The closures started at the end of
January, concurrent with the Chinese new year holiday, but have
now been extended twice.
Participants were factoring-in delays beyond the second half
of this month, however. According to fused alumina producers in
Henan in contact with Fastmarkets, workers who travel back into
the province from outside will not be allowed to return to work
immediately, but only after two weeks of self-imposed
quarantine – during which they will have their bodily
temperature checked on a daily basis.
What this means is that, even if operations could in theory
restart in 10 days’ time, the workforce may not be
able to run the plants for an additional two weeks.
"If you consider that, it’ll be the end of
February before plants start running again," a distributor
said. "And that is only if no other issues arise."
A trader added: "All the February shipments are delayed to
March. And the new production won’t be arriving in
Europe before the end of April at the earliest. Some people
will be short [of material]."
Prices muted, warning signs ahead
At the time of writing, most market prices have yet to show
a meaningful reaction to the new supply uncertainty.
Fastmarkets saw little change in prices for bauxite and
fused alumina over the past fortnight. Prices for two grades of
bauxite ticked up slightly, but BFA and WFA were mainly
The prices below were all assessed on Thursday February
The price assessment for bauxite, refractory-grade, 86%/2.0/3.15-3.2
(0-6mm), fob Xingang, was $400-420 per tonne, compared with
$395-420 per tonne previously.
Likewise, the price assessment for bauxite, refractory-grade, 88%/2.0/3.15-3.2
(0-6mm), fob Xingang, was $440-450 per tonne, widening
upward by $5 per tonne.
The prices of two intermediary purity grades remained
Fastmarkets assessed the price of bauxite, refractory-grade, 85%/2.0/3.15-3.2
(0-6mm), fob Xingang, at $385-395 per tonne, unchanged
since the previous assessment.
And the price of bauxite, refractory-grade, 87%/2.0/3.15-3.2
(0-6mm), fob Xingang, was similarly unchanged at $420-440
Confirmed business pushed the top end of the 88% range
upward, and the low end of the 86% range, while the majority of
other data points were in line with existing levels.
Fastmarkets received reports of some small lots sold at
prices that were significantly higher than the published
ranges. It understands that immediate delivery and small
volumes were some of the reasons behind the high premiums, but
the repeatability of these trades was not clear.
Fastmarkets assessed the price of alumina, fused brown, min 95% Al2O3, refractory
sized (0-6mm), fob China, at $720-730 per tonne, unchanged
from two weeks earlier.
The price of alumina, fused brown, min 95% Al2O3, FEPA
F8-220 grit, fob China, was assessed at $800-820 per tonne,
compared with $810-820 previously.
And Fastmarkets’ latest assessment of the price
for alumina, fused white, 25kg bags, cif
Europe, was unchanged at €670-770 ($736-846) per
At the same time, sources said that the short-term outlook
could prove bullish. "Prices didn’t move because
everyone in China is still at home," a trader said. "Once they
get back to work, it’ll start to happen."
One leading concern was that late shipments and disruptions
to new production would create a shortage, at a time when
consumers were destocking and relying on just-in-time
Buyers in Europe had been trying to run down their
inventories for the past several months, dogged by weak
performances by the refractories and steel sectors. Very few of
them maintained inventory beyond a working level.
Distributors and traders did the same, with one saying: "No
one has high stocks in Europe right now. It isn’t
feasible with such uncertain market conditions."
And another warned: "For those who need material in March
and April, it could be tough."