Nice, Bauxite Referenz Preis wieder über 50 USD/T
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CBIX up, alumina up, freight down.
CBIX rose 2.2% (US$1.1/dmt) over the week, as higher Value in Use (ViU)-priced cargos from Australia, Guinea and Brazil continued to dominate the index. The absence of lower priced (ViU) Malaysian ore as a counter-balance means the index continues to more fully reflect the value of bauxite sourced from the world’s most established and stable producers. On the ground in Malaysia, export activity remains sluggish implying stockpiles will not be cleared before year end and furthering the likelihood that the mining ban will continue into 2017. Against this backdrop, Malaysian prices have not moved, at US$27.5/dmt FOB for un-washed and US$39.5/dmt FOB for washed material.
Chinese domestic alumina prices jumped again, with the north up 3.4% (RMB94/t or US$13.6/t) to RMB2,853/t (US$414/t) and the south up 2.2% (RMB60/t or US$8.7/t) to RMB2,840/t (US$412/t) on the back of continuing tight supply, driven by smelter ramp-ups and winter stocking, and transport tightness (on-going crackdown on truck overloading). The government’s renewed focus on environmental compliance reached new heights over the week, with alleged breaches by bauxite mines supplying Chalco's Shanxi Huaxing refinery, and the refinery itself exposed on national TV for dumping waste into a tributary of the Yellow River. Strong rhetoric from central authorities about environmental conformance is likely to continue to keep pressure on the industry.
Environmental audits are also causing local tightness in bauxite supply in Shanxi, as many mines suspend production and prices head higher. As a result, there are delays in ramping up production from a number of refineries. Any delays in ramping up Chinese alumina production are likely to lead to higher domestic prices, which will likely flow through to ROW markets, and with the situation in China unlikely to be resolved quickly, higher prices could be sustained for at least the next three months.
A drop in vessel timecharter rates and a small drop in bunker (fuel) prices have reduced the capesize freight rate on the Guinea-Shandong route by 8% (US$1.3/wmt) to US$14.5/wmt. A slight rise in timecharter rates countered by the bunker price fall has left panamax rates on the North Australia to Shandong route flat at US$6.1/wmt.