Bauxite exhausted, aluminum enterprises reduce production

According to the latest statistics released by the State Customs recently, China imported 2.123 million tons of bauxite in May this year, a year-on-year drop of 65.5%, while the average price of imported bauxite was as high as US$60/ton, a record high since 2009.

Due to the long-term sluggish alumina prices, the unsatisfied amount of bauxite imports and high prices, aluminum companies in Shandong have had to reduce production to reduce losses. According to statistics, at present, the production capacity of aluminum oxide in Shandong Province has reached 3.5 million tons, and it is not ruled out that there will still be adjustments.

Aluminum companies are not eating enough

On January 12 this year, the Indonesian government banned the export of many kinds of ore products, including nickel ore and bauxite, and gave birth to the soaring situation of “demon nickel” in the first half of the year.

At the same time, a ban on bauxite in Indonesia has caused the price of bauxite to soar. The domestic aluminum enterprises are facing the dual pressure of high bauxite import prices and low aluminum prices. In order to reduce losses, some aluminum producers have to reduce production.

Statistics show that China’s electrolytic aluminum production accounts for approximately 40% of the world’s total production. In 2010-2013, China’s dependence on overseas bauxite was 48.6%, 61.7%, 49.5%, and 75.4%, respectively, and exceeded in imported bauxite. 60% is imported from Indonesia.

After the implementation of the export ban in Indonesia, China's bauxite imports fell sharply, and bauxite import prices hit a new high in recent years.

“The Indonesian ban on minerals has been implemented for more than half a year. The domestic bauxite import situation is not optimistic.” Wang Yu, an aluminum analyst, said that in 2013, the average monthly imports of bauxite reached 6 million tons, and most of it was imported from Indonesia. . According to the latest statistics from the State Customs, the total amount of imported bauxite in China was 2.123 million tons in May this year, a year-on-year decrease of 65.5%.

Wang Yu said that the high import volume in the single month last year was mainly due to the expectation of the domestic aluminum companies' anti-mine prospects for Indonesia. However, compared to the current monthly imports of more than 2 million tons, it is entirely true for companies that currently rely heavily on Indonesian minerals. Not enough to eat."

In fact, before the implementation of Indonesia's ban on minerals, domestic aluminum companies mostly accumulated about half a year of bauxite resources.

According to sources from the Nanshan Aluminum Securities Department, in response to the impact of Indonesia's ban on ore supply in the first phase of the company’s supply in 2014, the company began to purchase part of Rio Tinto's Australian cryogenic mines to increase the company’s inventory of low temperature mines from the second half of 2013. the amount. In addition, the company is also actively studying other bauxite markets worldwide, supplemented by the purchase of some Indian mines.

“Everyone had expected that the Indonesian anti-mine policy would be loosened after half a year, and now the bauxite deposits have gradually been consumed, but Indonesia's bauxite exports have still not shown signs of loosening,” said Wang Yu.

Reduction of production

Under the implementation of the Indonesian ban on minerals, domestic aluminum companies have been forced to import bauxite from distant destinations such as Australia and Africa, which has directly pushed up the prices of bauxite because of the supply of Indonesian minerals that China relied on.

Customs data showed that the average price of imported bauxite in China in May was US$60/ton, which is the highest price since 2009. Among them, the prices of Australian, Brazilian, Malaysian and Ghanaian mines have all increased in varying degrees, and Ghana’s ore prices have increased. It is up to 94.6 US dollars / ton.

Under the background of the long-term downturn in the prices of downstream alumina products, the rapid increase in the price of bauxite has undoubtedly caused the domestic aluminum companies that rely on imports to bear dual pressures, and the goal of controlling profits has become increasingly difficult to achieve.

According to reports, enterprises that rely heavily on Indonesia's imported mines mainly gather in the Shandong region. In the past six months, under the dual pressure of tight supply of bauxite and low alumina prices, the alumina utilization rate in Shandong has been increased by 70. % dropped to 61%, and the reduced production capacity involved has exceeded 3.5 million tons, and it is not ruled out that there is still capacity adjustment in the later period.

In April of this year, Aluminum Corporation of China announced that in order to reduce losses, it will implement flexible production of some of its electrolytic aluminum and alumina production lines. The capacity of electrolytic aluminum and alumina involved in the temporary suspension of production will be approximately 600,000 tons and 800,000 tons respectively.

“The company has not experienced a reduction in production at present because it has accumulated relatively abundant bauxite resources in the early stage and has not been affected for the time being,” said Nanshan Aluminum Securities.

The above-mentioned aluminum analysts stated that in order to deal with the shortage of bauxite in Indonesia, domestic aluminum companies have also added long-term plans to build factories in Indonesia in addition to purchasing other overseas minerals. She believes that in view of attracting foreign investment, the short-term Indonesian government will not completely liberalize the export of raw ore. This means that for domestic aluminum companies, short-term needs will have sufficient funds to overcome the difficulties.