Bauxite and fused alumina industry participants are once
again facing a supply crisis in the two upstream materials for
refractories after a volatile 2021 caused by the uncertainties
of market drivers. Those created a series of consecutive
downward adjustments in the prices for both brown and white
fused alumina (BFA and WFA) in the two months of the winter
shutdown period in China.
Anti-pollution controls started in November in the
major fused alumina production hubs of Henan province, adding
renewed pressure on output, which was just recovering from the
height of China’s power crunch in
Operations were reported to be shut down with unknown
schedules for restarting, or to be experiencing production cuts
amid staggered operations. Despite major operational
interruptions, the prices of BFA and WFA have been following a
Fastmarkets’ price assessment for alumina, fused white, 25kg bags, cif
Europe, dropped by €115 per tonne, 10.55% on the
mid-point, to €900-1,050 ($1,021-1,191) per tonne on
January 20 from the 16-year high at €1,060-1,120 per tonne
on October 28, 2021.
Meanwhile, Fastmarkets’ price assessment for alumina, fused brown, min 95% Al2O3, refractory
sized (0-6mm), fob China, declined to $940-980 per tonne on
January 20 from its 13-year high at $1,050-1,150 per tonne on
October 28, 2021.
Sources attributed the "counter-intuitive" price movement to
slowing demand at the end of the year in international markets,
plus the risk of a further price drop, considering the previous
rally in both BFA and WFA prices.
"We have [enough] inventory for the first quarter even
before the price of fused alumina started its crazy jump in
October," a buyer in Asia told Fastmarkets. "For now,
we’d like to stay on the [market] sidelines.
It’s still uncertain how the price for BFA will
move after China’s lunar new year
Bearish as it may be for BFA and WFA, sources speaking
to Fastmarkets are increasingly warning about possibly
tightening supply in the first quarter of 2022 with Winter
Olympics from February 4 to 20. While it is uncertain whether
the event will affect large volumes of fused alumina output in
major production regions, the chances of output cuts are high,
according to one producer of fused alumina in Henan
Two traders in Europe echoed this view.
"Operations in Sanmenxia city are still on halt after
earlier suspensions amid power shortages. Elsewhere in
Zhengzhou, output has been interrupted by Code Orange emergency
protocols in the past two months. Those regulations will only
be more rigid during the Olympics," a second producer in Henan
The outlook seems unclear, according to a third
producer in China. It will depend on the operating rates after
China’s lunar new year holiday. Meanwhile, there
is a Covid-19 outbreak in the north of China, especially in the
port of Tianjin, adding to logistics costs for inland suppliers
already considering the twofold increase of land transport
costs from Henan to the port.
Compared with fused alumina, the market for refractory
grade bauxite in 2021 seemed to be less volatile, with prices
fluctuations within the range of $10-20 per tonne for the past
Fastmarkets assessed the price for bauxite, refractory-grade, 85%/2.0/3.15-3.2
(0-6mm), fob Xingang, at $450-460 per tonne on January 20,
stable for a month-and-a-half, just $10 per tonne down on the
high end from its five-year-high of $450-470 per tonne on
The prevailing availability risk could be one driver behind
the flat bauxite prices. Sources said that calcination kilns
had all been shut down in the major production hub of Xiaoyi.
Others in regions such as Jiexiu, in Yangquan, have also been
closed because of bauxite ore shortages or higher costs for
natural gas and coal in the winter season, according to
Elsewhere, the environmental controls in
December-January in Guizhou province, another production hub
for calcined bauxite, added to the pressure on supply.
Inspection teams from China’s Ministry of Ecology
& Environment (MEE) reported mining violations in Guizhou
province in January, accounting for almost half of those mining
activities failing to file for official documents, resulting in
severe damage to the local environment.
Their reports specifically pointed out violations of
laws and regulations in the development of mineral resources in
regions such as Xiuwen of Guiyang City and Huangping of
Qiandongnan Prefecture. As a result, bauxite mining activities
in Guizhou were said to be shut down for a month-and-a-half for
further upgrades to meet regulatory standards, according to
"The market is consuming existing inventory with
limited new output from either Shanxi or Guizhou. There could
be a supply gap once the downstream market is active again
after the holiday," a producer of bauxite in Shanxi
"The current market is quiet, which could account for
the stable prices," a trader of bauxite told Fastmarkets.
"However, the market outlook after the holiday is very
uncertain with new possible operation