Bauxite resources restrict the development of aluminum processing industry

China's bauxite reserves only account for 2.8% of the world's reserves, while aluminum processing capacity has reached 53% of the world's. China's bauxite resources are becoming increasingly scarce, reserves of reserves are declining, and the supply of high-alumminated ore-rich mines has become increasingly prominent. Senior analyst Zhang Lingling pointed out that the bauxite resources restrict the development of the aluminum processing industry.

From the history of China’s bauxite imports in the past decade, China’s demand for imported bauxite has been around 10 million tons since 2006. In 2009, due to the financial crisis, the production of alumina smelters reduced production, which led to weakened demand for imported bauxite. In mid-2012, Indonesia began to control the export of bauxite in stages, and once again released exports at the end of the year, which led to the shrinking of China's bauxite imports. In January 2014, Indonesia officially halted the export of bauxite, after which a large number of Chinese buyers stored inventories, leading to a sharp increase in imports in 2013. In 2015, China imported a large amount of bauxite from Malaysia, which led to a return of more than 50 million tons of bauxite imports.

Before 2014, bauxite in Indonesia dominated the Chinese market, accounting for more than 60%. In 2014, Indonesia stopped the export of bauxite. Australia's bauxite accounted for 43% of the country's total and became China's largest supplier of bauxite, followed by India's bauxite accounted for about 14%. In 2015, Malaysia's bauxite mines soared, accounting for 43% of the country's total, which surpassed Australia to become China's largest supplier of bauxite. With the gradual increase in the supply of bauxite in countries such as Brazil and Guinea, the supply of bauxite in Australia and India fell to 35% and 13.9% respectively in 2015. According to customs data, China's bauxite imports in 2015 were about 55.8 million tons, up 53.94% year-on-year. In the second half of 2015, China’s bauxite imports remained high overall, with a single month’s imports of over 4.4 million tons, and in December it reached the highest point of 7.11 million tons during the year.

Pahang is the third-largest state in Malaysia and is a key bauxite producer. Kuantan, the capital of the state, has experienced rapid development over the past two years to meet demand from China, the top aluminum producer. But crazy mining has caused public opinion to be awkward. Many people complain about water pollution and environmental damage. On January 15, 2016, Malaysia imposed a ban on all bauxite mining activities and frozen new export permits for three months. The current ban has been extended to July, and the late policy is still unclear.

China is the second largest producer of bauxite in the world, with an annual production of about 47 million tons. However, the quality of ore is deviated. It is difficult to develop and smelt, and it is not conducive to the production of alumina. Therefore, it has long depended on imports. Australia is the world’s largest producer of bauxite, with annual production of about 81 million tons, tighter global supply, and strong growth in China’s market, which is driving bauxite prices up. Manufacturers hope to fully activate spare capacity for bauxite smelting and aluminum production, and then export high value-added aluminum products to overseas markets. There is no doubt that demand for high quality bauxite in the Chinese market is rapidly rising. As Indonesia and Malaysia restricted the export of bauxite, China's aluminum smelters began to look more closely at the Australian bauxite deposits with abundant reserves and unique quality advantages.

Australia's bauxite resources are concentrated in three regions: CapeY Cape York, Cape York, Cape Weypa, Ork, on the ork peninsula, Gowe Gove, on the Gogo Peninsula in the Northern Territory, near Gulf of Carpentaria, in the Gulf of Carpentaria; Darling Ranges, south of Perth, Western Australia; Mitchel Plateau, Mitchell Heights, Kimberley Highlands, Northern Cape, and Cape-Bougainvile, Cape Bougainville, the development of the area is currently not economical.

Australia has the second largest bauxite reserves in the world. It is basically a mixture of gibbsite and gibbsite and boehmite, and the bauxite contains low amounts of silica and is a high quality bauxite. mine. At the same time, Australia's bauxite mines also have the feature of easy mining, so their production costs are low.

Australia's alumina refining industry currently ranks among the world's leading. There are currently six alumina plants in Australia, four of which are in Western Australia, one in Queensland and one in the Northern Territory. Most alumina plants are located close to the bauxite area, and only the alumina plant near the Weipa bauxite mine area.

Compared with other countries, Australian bauxite mines have only supplied Rio Tinto with a company for many years and have signed long-term orders directly with Chinese consumers. However, the number of bauxite suppliers in Australia will increase in 2016, such as Alcoa, Bauxite Australia and Metro Mining. Australian bauxite export competition will intensify and market prices are expected to fall.

At the end of 2015, along with the decline in commodity prices, the prices of bauxite, alumina and metal aluminum all declined, indicating that the global economy is in a downturn. However, with regard to the supply and demand conditions in the downstream industries, the demand for bauxite in the automation, aviation and commercial construction or commodity resource industries is expected to improve. One of the positive consequences of the low price of aluminum is that the tendency of aluminum to replace traditional materials such as copper and steel has increased. Among them, aluminum core cable instead of copper, the best prospect for the development of power transmission. The increase in consumption of downstream industries will not only promote the increasing production of bauxite on a global scale, but will also contribute to higher bauxite prices. Considering that high-grade bauxite ultimately reduces energy costs and chemical reagent costs, downstream companies are more willing to purchase high-grade high-grade bauxite.

According to analysis, by 2025, China's annual demand for bauxite may double to 104 million tons. Zhang Lingling pointed out that China's consumption of bauxite will reach its peak in 2019, and refineries in Henan and Shanxi are expected to turn to rely on imported bauxite.