At the time of writing on Friday February 14, a number of
production companies in both provinces were either closed or
operating only at a minimum level. Hampered by provincial
border closures, a crackdown on logistics and health-related
restriction measures taken by local governments, sellers have
said that this will lead to lower production and late shipments
to seaborne markets.
Authorities in Shanxi province issued a document titled
"Opinions on stabilizing labor relations and supporting
enterprises to recover operation and production during epidemic
prevention" on February 11. Aside from measures to deal with
labor relations during this period, it also indicated that
production recovery would be based on each
company’s specific situation rather than a blanket
approval for recovery.
According to a producer of bauxite in Yangquan, in Shanxi
province, if a factory is to resume production, at least two
conditions must be met, including single-room accommodation for
workers and daily health monitoring.
"We have our own industrial park, which is an advantage so
that we can provide workers with daily necessities," the
producer said. "As for logistics, we have our own trucks and
the highway is open, so it is working normally for us now."
But many other producers in Yangquan, Xiaoyi and other
cities in Shanxi that cannot meet these conditions have been
allowed to restart operations with their applications
"We have filed our application forms to the government and
are waiting for the reply," a bauxite producer in Xiaoyi
"It’s unknown when the logistics will be back
[to normal]. But except for the expressway, roads through
counties have been blocked. Vehicles from outside the area are
allowed to enter only if they have a permit issued by the local
police station, which might take days to get," a third bauxite
producer told Fastmarkets.
"Inventory of certain grades of bauxite is running low since
calcination is not allowed at the moment," a bauxite trader
said. "We have heard that the price of domestic bauxite for 85%
grades is up by 100-150 yuan per tonne to 2,300 yuan [$329] per
tonne, while the 86% grade [price has gone up to] 2,400 yuan
A trader of bauxite told Fastmarkets that the concern over
China’s bauxite supply was because some major
producers were effectively closed at the moment.
"Logistics is very patchy all across China. Crossing
provincial borders is downright impossible now. If you are
anywhere inland, you can’t move material to the
ports on the coast," one local producer of bauxite and alumina
"We don’t expect to be able to ship anything
out of our plant until the first or second week of March," a
second producer, with operations in Shanxi, added. "There are
no couriers available now. What this means is that no ships are
going to be loaded until March 18 at the earliest."
Due to the holiday for the Chinese lunar new year, which was
supposed to end on January 30 but was extended to February 10
in most provinces because of the virus outbreak, prices of
bauxite assessed by Fastmarkets have remained unchanged from
before the holiday.
The latest assessment of the price of bauxite, refractory-grade, 85%/2.0/3.15-3.2
(0-6mm), fob Xingang, was $385-395 per tonne on February 6,
unchanged from two weeks earlier.
Fused alumina, Henan
Production of fused alumina in Henan province was severely disrupted over the winter months of
2019 due to an earlier environmental crackdown, especially
affecting the production of brown fused alumina (BFA).
At the beginning of 2020, the coronavirus outbreak became
another factor to badly affect fused alumina production in the
It has been said that production of fused alumina in
Zhengzhou and Luoyang would not recover until the end of
February. Logistics movements were not permitted until further
"Production has been halted here from last November [due to
the environmental shutdown]," a BFA producer in Luoyang told
Fastmarkets. "We don’t know when operations will
be back to normal. It depends on the virus control…
After all, Henan is geographically close to Hubei, where the
virus first broke out in December last year."
In another production area, Sanmenxia, production was
partially back with a limited number of kilns in operation.
"To be allowed to have workers back at factories, we need to
guarantee that they stay within the park and live by
themselves," a white fused alumina producer in Sanmenxia said.
"Logistics has also recovered partially here, but it takes a
lot of effort to get land transport through the blocked
As far as the price of fused alumina is concerned, producers
want to keep it stable at the moment because "we
don’t know how to adjust it and now we cannot
guarantee the supply, given the uncertainty brought about by
the outbreak," a fused alumina producer in Luoyang said.
"Before the holiday, we were consuming inventory of BFA due
to the environmental crackdown," a trader in fused alumina in
Tianjin said. "Now, with the continuing closures, the inventory
is getting lower."
Fastmarkets’ latest fortnightly price
assessment for alumina, fused brown, min 95% Al2O3, refractory
sized (0-6mm), fob China, was unchanged at $720-730 per
tonne on February 6.
On the same day, the price of alumina, fused white, 25kg bags, cif
Europe, was €670-770 ($728-836) per tonne.