Bauxite prices firm but alumina shows mixed fortunes

By Sybil Pan
Published: Wednesday, 16 February 2022

Supply risk has put a brake on the declining price of brown fused alumina (BFA) although white fused alumina (WFA) prices were still down.

Prices for refractory-grade brown fused alumina (BFA) stabilized in late January after five consecutive drops, while the price for abrasive-grade BFA continued to tick down slightly on the low end. White fused alumina (WFA) prices fell again in January despite upward adjustment in the feedstock price, while bauxite prices remained firm on a looming supply crisis.

Fastmarkets’ price assessment for alumina, fused brown, min 95% Al2O3, refractory sized (0-6mm), fob China, was $940-980 per tonne on January 20, in line with the previous assessment after falling for more than two months.

On the same day, Fastmarkets assessed the price for alumina, fused brown, min 95% Al2O3, FEPA F8-220 grit, fob China, was $980-1,090 per tonne, widening downward by $20 per tonne from the previous assessment.

Liquidity was low for both grades of BFA in January in the run-up to China’s lunar new year holiday from January 31 to February 6.

The stabilized refractory-grade BFA price indicated an improvement in market sentiment over concerns about supply risks while China hosts the Winter Olympics, given that major production hubs such as Henan and Shanxi provinces are close to Beijing.

While the bulk of operations in Henan have already been put on temporary shutdown, in line with the environmental regulations to limit air pollution in the winter months, any remaining active plants were ready to be suspended for the holiday period.

Whether production will resume after the holiday remained unknown for many producers in China. "Frequency of inspections might increase and there could be operational cuts for individual producers," a local producer told Fastmarkets.

Meanwhile, Fastmarkets assessed the price for alumina, fused white, 25kg bags, cif Europe, at €900-1,050 ($1,021-1,191) per tonne, down by €30 per tonne with confirmed liquidity at the high end of the range.

Prices for WFA have been moving downward in the preceding month on slow demand and previous drops in the price for Bayer alumina powder, feedstock for WFA manufacturing.

Bayer alumina powder prices dropped from 4,000 yuan ($628) per tonne in the middle of October to 2,804 yuan per tonne at the start of 2022, then ticked upward slightly to 2,840 yuan per tonne, according to sources.

Given that Bayer alumina powder is a major driver behind the price changes in WFA, a sharp decline in the former has resulted in losses for the latter over recent months. Following the recent upward adjustment on Bayer alumina powder, WFA suppliers believed that supply concerns might limit further losses in WFA and add support to the market performance.

The market outlook was bullish for the first quarter of 2022, considering that the market was short of feedstock material and there were likely to be new restrictions on output during the Winter Olympics, according to a producer in Henan.

Alumina, fused brown, min 95% Al2O3, refractory sized (0-6mm), fob China, $/tonne  

Bauxite firm

Fastmarkets’ price assessments for all four grades of bauxite remained unchanged for a second consecutive fortnight in the assessments on January 20.

Liquidity remained low over the period, with market participants expressing concerns about the availability of refractory-grade bauxite after the lunar new year holiday.

"While the market is weak now, supply risks [affecting] bauxite amid the Winter Olympics and mining regulations in Shanxi and Guizhou could limit any further losses of material," one trader of refractories in China said.

Despite a slow recovery in the mining of bauxite ore in Shanxi, calcination rates have stayed at minimum levels due to high prices for bauxite ore and anti-pollution regulations affecting the coal-fueled operation kilns, especially in Xiaoyi City, which was expected to be halted until the middle of March, according to sources.

Fastmarkets’ price assessment for bauxite, refractory-grade, 85%/2.0/3.15-3.2 (0-6mm), fob Xingang, was $450-460 per tonne on January 20.

The price for bauxite, refractory-grade, 86%/2.0/3.15-3.2 (0-6mm), fob Xingang, was $460-480 per tonne on the same day, while that for bauxite, refractory-grade, 87%/2.0/3.15-3.2 (0-6mm), fob Xingang, was $480-500 per tonne.

And the assessment for bauxite, refractory-grade, 88%/2.0/3.15-3.2 (0-6mm), fob Xingang, was $500-520 per tonne.