CBIX up, Malaysia exports to resume

Bauxite prices were up 3.5 per cent (US$1.5/dmt), closing at US$44.9/dmt for the week, driven by higher ViU-priced cargos from Brazil. In Malaysia, AK and Spring Energy have resumed mining and are planning to export through Kemaman port, some 20-30km north of Kuantan port. We therefore expect to see exports from Malaysia hit the radar again in the near term, although capacity through Kemaman has some constraints, so it’s unlikely to be large tonnages over the next few months. Malaysian prices remain in the range US$25/dmt to US$27/dmt (unadjusted) for unwashed material.

Bauxite originating from Guinea continues to increase its presence in the traded bauxite market (into China), as the SMB joint venture consolidates itself as a consistent export entity with increasing market influence. Grades for SMB bauxite landed in China remain unclear, given some vessels appear to have been loaded with bauxite from different mines, which impacts the average alumina and silica content of each cargo.



Alumina production from imported bauxite has risen in the first 3 months of 2016, from an estimated annualized rate in January of 16.9 MTPY to over 18.1 MTPY in March. This equates to around 3 MTPY higher imported bauxite demand. We estimate China's 2015 total alumina production from imported bauxite at 18.3 mln t, suggesting merchant refiners have restarted capacity and are now running at around average 2015 rates.

Chinese domestic alumina prices were unchanged this week, holding recent gains that have seen the price rebound to pre-November 2015 levels. North China prices were quoted at RMB2,004/t (US$308/t including VAT), with the south at RMB1,880/t (US$289/t including VAT).

Bunker (ship fuel) prices moved higher again, but a further retreat in both Panamax and Capesize charter rates resulted in an overall decline in freight rates.