28 JUNE 2016The Bauxite Index
CBIX up, Malaysian ban to be relaxed
Edited by : AL CIRCLE
2 min read
CBIX nudged higher over the week, up 1.5 per cent (US$0.7) to US$45.8/dmt on the back of higher ViU-priced Australian material. Given the current linkages between bauxite prices and alumina prices, we expect to see the former gain further ground, as the rebound in alumina prices begins to flow through to the bauxite market.
Malaysian authorities are poised to relax the current bauxite export ban, although only a few new export licences have been granted so far. The decision to lift the ban comes on the back of stocks at Kuantan port being totally cleared, environmental regulations put in place and several of the larger miners taking the necessary measures to meet the environmental regulations. We expect to see a resumption of larger volume exports as a result, although the additional environmental requirements are likely to push bauxite prices (FOB Malaysia) higher, we estimate by around US$2/dmt over the months ahead.
Despite the likelihood of the ban being relaxed, Malaysian FOB prices remained unchanged on US$25/dmt to US$26/dmt for unwashed material. Washed material is still selling for US$37/dmt FOB. We also note vessels now arriving in China from Malaysia’s Johor region, signalling a potential shift in location amongst Malaysia’s bauxite miners. Johor is a well known and well explored region of Malaysia.
Chinese domestic alumina prices took a knock during the week, with the North down 2 per cent (RMB40/t) to RMB1,912/t (US$290/t including VAT) and the South down 0.8 per cent (RMB15/t) to RMB1,840/t (US$279/t including VAT). We also saw public announcements for two new Chinese-sponsored alumina refineries, one in China’s southern Guangxi province (4 MTPY) and the other in Laos (1 MTPY).
Panamax freight rates rose slightly, on the back of higher shipping fuel prices and charter rates. Capsize rates, however, pulled back on lower vessel charter rates.
Malaysian authorities are poised to relax the current bauxite export ban, although only a few new export licences have been granted so far. The decision to lift the ban comes on the back of stocks at Kuantan port being totally cleared, environmental regulations put in place and several of the larger miners taking the necessary measures to meet the environmental regulations. We expect to see a resumption of larger volume exports as a result, although the additional environmental requirements are likely to push bauxite prices (FOB Malaysia) higher, we estimate by around US$2/dmt over the months ahead.
Despite the likelihood of the ban being relaxed, Malaysian FOB prices remained unchanged on US$25/dmt to US$26/dmt for unwashed material. Washed material is still selling for US$37/dmt FOB. We also note vessels now arriving in China from Malaysia’s Johor region, signalling a potential shift in location amongst Malaysia’s bauxite miners. Johor is a well known and well explored region of Malaysia.
Chinese domestic alumina prices took a knock during the week, with the North down 2 per cent (RMB40/t) to RMB1,912/t (US$290/t including VAT) and the South down 0.8 per cent (RMB15/t) to RMB1,840/t (US$279/t including VAT). We also saw public announcements for two new Chinese-sponsored alumina refineries, one in China’s southern Guangxi province (4 MTPY) and the other in Laos (1 MTPY).
Panamax freight rates rose slightly, on the back of higher shipping fuel prices and charter rates. Capsize rates, however, pulled back on lower vessel charter rates.
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