CBIX edges lower on Malaysian cargos

CBIX declined 1.5 per cent over the week (US$0.7/dmt), closing at US$46.1/dmt, with lower ViU-priced Malaysian bauxite re-appearing to pull the index lower. This is despite the Malaysian bauxite mining ban being extended until at least mid-September. The recent Malaysian cargos come as a result of government-mandated clearing of existing mine stocks, as well material originating from other parts of Malaysia, rather than the signaling of a return to mining in the Kuantan region.
 
Industry participants in Malaysia are expecting the ban to be lifted on September 15, claiming that all requirements necessary to meet stricter operating regulations are now in place. These new regulations are likely to lift prices in Kuantan, as well as see further migration of mining activities to Johor, which may see that region continue to develop into another exporting base for Malaysia.

 
Malaysian FOB prices remain unchanged at US$26/dmt (non ViU-adjusted) for unwashed material, with washed material priced at approximately US$37/dmt FOB.
 
Chinese domestic alumina prices were up marginally over the week, with the North price higher by 2.6 per cent (RMB44/t) to RMB1,756/t (US$264/t including VAT) and the South up 3.5 per cent (RMB60/t) to RMB1,780/t (US$268/t including VAT). The increase is attributed to some short-term tightness, as domestic refiners hold back sales in search of higher prices.
 
Panamax freight rates remained steady over the week, with a slight fall in charter rates countering a rise in bunker (fuel) prices. Capesize charter rates increased slightly which, combined with the bunker price rise, lifted overall capesize freight rates. Capsize rates on the Guinea to Shandong route are currently estimated at US$8.8/wmt, still hovering around historical lows.