China bauxite prices plateaus despite higher ViU-adjusted material from Brazil

Bauxite prices remained flat over the week, down slightly (0.1 per cent or US$0.1/dmt) to close at US$43.4/dmt. This was despite higher ViU-adjusted material from Brazil impacting prices. Bauxite exports from Guinea by SMB (Weiqiao) are also influencing CBIX, although it remains unclear what grades the company can consistently export from its current tenements. The company is reportedly loading at least one cape vessel per week, so we expect to see Guinean prices having more influence on CBIX over the weeks and months ahead. We also expect to see Malaysian bauxite re-enter to the market over the months ahead, raising the prospect of Chinese merchant refiners looking to continue building their stockpiles, collectively estimated by CM at 35 million tonnes.

Activity in Malaysia remains quiet ahead of further news on the ban, with quoted prices (unadjusted) unchanged in the range US$25/dmt to US$27/dmt (unwashed).

Chinese domestic alumina prices continued their upward trajectory, breaking through the RMB2,000/dmt mark for the first time since November 2015. Prices in the North were up 0.8 per cent (RMB15/t) to RMB2,004/t (US$309/t including VAT), while the south was unchanged on RMB1,880/t (US$290/t including VAT).

Bunker (ship fuel) prices rose again, but a drop in both Panamax and Capesize charter rates resulted in slightly lower freight rates over the week.