In conversation with Stockhead, a business news publication dedicated to connecting investors with emerging ASX-listed companies, Lowell Resources Fund's chief investment officer, John Forwood, highlights that the booming bauxite prices are bringing attention back to ASX stocks and how. To his surprise, the unprecedented rise in bauxite and alumina prices has made some of Australia's top fund managers vigilant of these commodities.
Image Source: The Australian Aluminium Council
In the Chinese market, the world's largest consumer of bauxite and alumina, Guinea bauxite price is currently standing at US$92 per tonne, marking an increase of about 20 per cent since the bauxite export suspension by EGA-owned Guinea Alumina Corporation (GAC) in early October. Since the beginning of the year, the price has surged by 31 per cent until now. The Australian bauxite price has increased by 5 per cent since mid-October and 30 per cent since the beginning of the month, reaching US$70 per tonne.
The year-to-date Australian alumina FOB price has skyrocketed by 126 per cent to US$785 per tonne as of December 2, 2024, driven by frequent events of supply disruptions throughout the year. From the closure of Alcoa's Kwinana refinery to force majeure at Rio Tinto's Australian plants in Queensland, all the events caused bauxite supply disruptions, leading to an alumina price hike. The recent development in Guinea also added volatility in the market, propelling alumina price growth.
There are only six bauxite companies on the Australian Securities Exchange Limited (ASX), but most of them are large ones owned by Rio Tinto, Alcoa, and South32. Of all the miners, Metro Mining, an Australian mining and exploration company based in Brisbane, yielded the highest benefits of skyrocketing bauxite prices. The $350 million capped company has seen a share lift of 215 per cent through the year, with realised pricing up 14 per cent Y-o-Y at 7 million tonnes per annum Bauxite Hills project near Weipa.
Metro Mining Limited also recently secured multi-cargo offtake agreements with Xinfa Aluminium Group, Chalco, and Shandong Lubei Enterprise Group for bauxite shipments from its Bauxite Hills Mine in Queensland, covering the years 2025 and 2026.
John Forwood also proclaims that bauxite has become the top-performing metal market in 2024. He explains, "The bauxite price has really been tightening up hugely with the issues in Guinea in terms of export permits."
Forwood has also highlighted that bauxite demand has been robust this year. China has been increasing its bauxite import volume each year as domestic ore is becoming of a lower grade in quality. The rising demand for seaborne bauxite for increased alumina production, reaching 70.66 million tonnes from January to October 2024, has driven the prices to record highs.
Forwood projects bauxite stocks may return to the IPO market in 2025. He said, "It's a good time to be preparing an IPO for bauxite."
