1. Market Overview:
Domestic bauxite: the second quarter of 2022 domestic mine supply tight situation eased earlier, but prices first fell after rising. At the beginning of the second quarter, due to the outbreak of the epidemic in various parts of the country to varying degrees, the progress of the resumption of mining in various parts of the country was not as good as expected. Although production increased, the spot market circulation situation was not ideal, resulting in a cold trading atmosphere, alumina plant production continues to consume inventory. And in the middle of the second quarter, as the epidemic situation gradually stabilizes around the country, mining resumed normally and output increased, and as the price of imported mines is on the high side, lead to the cost of alumina enterprises in northern Shanxi and Henan inverted phenomenon, the proportion of imported ore use reduced, increased demand for domestic ore, ore prices were affected by this, the price of a phased increase.
Bauxite imports: the beginning of the second quarter of 2022, the sea freight continued to decline in the early trend of stability. But with the end of the May Day holiday, crude oil stocks fell, oil prices and other market factors led to a sharp rise in sea freight, leading to a simultaneous increase in the price of imported ore. Secondly, as news of Indonesia’s export ban came out again in April, market activity increased again, and the price of imported ore rose, among which, shipping Guinean ore to Chinese ports can cost up to about $40 a ton. Although the recent decline in sea freight, but for the import of ore price impact is limited.
2. Market analysis:
1. Domestically produced ore: affected by the severe situation of the epidemic situation in various places, the resumption of mining in various places did not progress as expected at the beginning of the second quarter. Secondly, due to intensified measures to control the epidemic situation in various places, transportation was hindered, lead to the actual spot market trading news from time to time, the market atmosphere calm. In the later stage, as the epidemic situation gradually stabilized, the progress of mining resumed and the market spot circulation increased, but the demand gap of domestic mines was more obvious because of the large consumption of ore stocks in alumina enterprises in the early stage, as a result, supply and demand for ore remain tight. Recently, due to pressure on alumina prices, including the northern Shanxi and Henan alumina enterprises increased cost pressure, lower proportion of imported ore use, domestic ore demand again.
In terms of price, the current mainstream in Shanxi province contains 60% aluminum, and the price of domestic ore with an aluminum-silicon ratio of 5.0 grade is basically at 470 yuan per ton of bare price to the factory, while the current mainstream in Henan province contains 60% aluminum, the price of domestic ore with an aluminum-silicon ratio of 5.0 grade is basically at 480 yuan per ton or so. The current mainstream in Guizhou contains 60% aluminum, aluminum-silicon ratio of 6.0 grade of domestic ore is basically at 390 yuan per ton or so to the factory price.
2. Imported ore: with the gradual release of new alumina production capacity downstream at the end of the first quarter, the production of this part of the capacity is more dependent on imported ore; Import ore demand in the second quarter as a whole is still upward trend.
The price of imported ore fluctuated in the second quarter, and the overall price basically remained on the high side. On the one hand, due to the influence of overseas policies, many parties in the market pay more attention to imported ore, which supports the operation of imported ore market prices. On the other hand, the overall sea freight rate is still on the high side compared with the 2021 period, affected by the linkage between the two prices, the price of imported ore at a high level in synchronism shock operation.
3. Outlook:
Domestic ore: short-term bauxite market price center of gravity is expected to stabilize the overall trend, but prices are still expected to rise.
Import ore: the recent price of sea freight lower, driving the price of imported mine slightly down. But the market for the import of ore still maintain a certain degree of concern, a certain price support.
Post time: 30-11-2022
