CBIX eases, Malaysia exports from existing bauxite stockpiles

Bauxite prices eased 1.6 per cent (US$0.7/dmt), closing Friday at US$44.2/dmt for the week. Several lower ViU-priced cargos from Malaysia contributed to the marginal decline over the week. Although Malaysian bauxite exports have resumed, mining activities have not - current exports (via Kemaman port mainly) comprise stockpiled bauxite originating from outside Kuantan port (circa 2 mln t). Malaysian FOB prices were reportedly unchanged at US$25/dmt to US$27/dmt (unadjusted) for unwashed material and US$37/dmt for washed material.

Cargos from SMB’s Guinean operation continue to make an impression on the CBIX index, although reported import and export grade data for Guinean cargos do not always align. Some vessels appear to have been loaded with bauxite from different mine origins. Reporting a single source only has the potential to introduce variation into the CBIX calculation.

Last week marked two important milestones for the industry

1) The official start of construction for SMB’s second barge loading facility at Boke, Guinea, which is scheduled to be commissioned in October. Once complete, SMB will have the cumulative capacity to load bauxite at an annualised rate in excess of 20 MTPY.

2) The official opening of the Hongqiao/PT Harita alumina refinery in Kendawangan, West Kalimantan. Nameplate capacity for the refinery is 1 MTPY, with an option to double its size to 2 MTPY.

Chinese domestic alumina prices are currently treading water; the North China price was down slightly, by 0.3 per cent (RMB6/t) to RMB1,998/t (US$306/t including VAT), with the south unchanged on RMB1,880/t (US$288/t including VAT). General industry sentiment may have reached a plateau, suggesting prices are unlikely to continue their recent gains.

Freight rates increased slightly with increases in both bunker (fuel) and vessel daily charter rates.