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[October 2008]
Latest Bauxite Supply & Demand Report Published
A new report from Roskill analyses the world-wide bauxite supply and demand scene, with the following various extracts highlighted by the publisher:
Growth in Chinese production
Chinese production of alumina, driven by rapidly expanding demand for aluminium, grew at an average rate of 22% pa between 1998 and 2007 and by 42% in 2007 alone. The demand for bauxite that this expansion generated was met by a rapid opportunistic increase in Indonesian bauxite output, resulting in Chinese imports from Indonesia rising from 832,000t in 2004 to 15.4Mt in 2007. This rate of imports continued into 2008 with China importing 8.8Mt in the first four months of the year, 4.8Mt of which came from Indonesia.With some 25Mtpy of new alumina capacity planned in China in the next two to three years, demand for bauxite, much of which will have to be imported, will continue to rise. It is not clear if the Indonesian bauxite mining industry will be able to support Chinese demand in the long term and higher priced imports from India are also growing rapidly. The Chinese alumina industry is also looking to Australia as a source of bauxite. Chalco, China's largest alumina producer, is investing in the 7.5Mtpy Aurukun project in northern Queensland.
Guinea well placed to meet global demand
Guinea in West Africa, having the world's largest bauxite resources, would appear to be well placed to meet rising global demand for bauxite. Lack of infrastructure coupled with political and economic instability, however, appear to be hampering the development of Guinea's bauxite resources, although some major long term projects are in existence and appear to be proceeding. The bauxite and alumina industries in Australia and Brazil are growing rapidly with some 16Mtpy of new bauxite capacity planned in both countries, and 6Mtpy of new alumina capacity planned in Australia and 13Mtpy in Brazil.Industry undergoes major changes to corporate structure
The corporate structure of the world's bauxite and alumina industry has undergone significant consolidation in recent years, with Rio Tinto's takeover of Alcan (in 2007), and Rusal's takeover of Sual and the bauxite and alumina interests of Glencore (in 2006). The new entities, Rio Tinto Alcan and UC Rusal are respectively the world's largest and fourth largest producers of bauxite and the fourth largest and largest producers of alumina. The prospective acquisition of Rio Tinto Alcan by BHP Billiton, if it goes ahead, would create the world's largest producer of both bauxite and alumina by a considerable margin.About 72Mt of alumina were used in primary aluminium production in 2007. Industry analysts are forecasting that aluminium demand will grow at a rate of 5.5%py between 2007 and 2015. In a five-year time frame, this would result in primary aluminium production of about 50Mt in 2012, which would require some 95Mt of alumina.
Demand for non-metallurgical bauxite is expected to grow at an annual average rate of 2.1% to reach about 8.3Mtpy by 2012, whereas that for non-metallurgical alumina and ATH will grow at faster rates of 3.7%py and 3.9%py respectively, resulting in markets of 4.8 Mtpy and 4.6 Mtpy. Proppants are expected to show fastest growth rates for bauxite, while aluminium fluoride, refractories and cement will be the fastest growing markets for alumina and ATH.
World trade in bauxite almost doubled (increasing from 20% to 30% of consumption) over the period 2002 to 2007 to exceed 60Mt in 2007, largely because of substantial increases in Chinese imports mainly from Indonesia. The bulk of world trade in bauxite is accounted for by exports from Guinea, Indonesia, Australia, India and Brazil and imports into China, the USA, Ukraine, Ireland and Spain.
With production capacity for both smelter grade and non-metallurgical alumina increasing, prices are expected to show more stability in the future, and may come off the highs seen in mid 2008. The opposite may happen with bauxite reflecting a potential deficit.
The Economics of Bauxite (7th Edition 2008) is available at £2400/US $5000/€4000 from Roskill Information Services Ltd, 27a Leopold Road, London SW19 7BB, England.
www.roskill.co.uk
ENDS