Bauxite exports to China unleashes new high in Q1'22, imports up by 15.4% Y-o-Y

Bauxite exports to China reached new highs in the first quarter of 2022, expanding at a rate of 12.8 per cent annual pace between 2017 and 2021, much surpassing all other commodities, which rose at a combined rate of only 4.3 per cent each year. Bauxite arrivals climbed 13.6 per cent in the fourth quarter of 2021 compared to the fourth quarter of 2021, with exports from Guinea accounting for 57 per cent of total volumes.

“In the first quarter of 2022, China’s bauxite imports hit record levels, increasing 15.4% y/y. This is in stark contrast to China’s total bulk imports which, excluding bauxite, dropped by 10.5% y/y,” said Niels Rasmussen, Chief Shipping Analyst at BIMCO.

The demand for bauxite imports has remained strong so far in 2022, and the price of aluminium has risen to its highest level in 14 years. Aluminium prices have surpassed US$ 3,000 per tonne for the first time since 2008 as a result of the Russia-Ukraine conflict, which is projected to lead to an increase in local aluminium output.

“If the government succeeds in establishing large alumina refineries in Guinea, bulk shipping patterns will change. It takes four tonnes of bauxite to produce one tonne of alumina, which would cause a decline in the number of shipments between Guinea and China,” says Rasmussen.

The aluminium supply chain may change again in the long run, since Guinea's interim government has challenged multinational mining businesses in the country. Mining firms must propose investment plans for alumina refining units by May 2022, according to the military junta.

“Despite being named for the Guinean port, Kamsarmaxes play only a very small role in the Guinea-China shipments and Capesizes are the main beneficiary of China’s demand for the commodity, carrying a little more than 70% of all volumes,” added Rasmussen.