China’s bauxite imports 27% higher in Jan-May 2015 compared to same period in 2014

Following the Indonesian Bauxite ban in January 2014 high-quality bauxite stockpiles and reserves in China are being depleted, and China continues to look for new import markets. Towards the end of 2014 there was a substantial pick-up in Malaysian bauxite exports to China, with lower-cost product being shipped based on lower freight costs.

The bauxite stockpiling in China during 2013 had a dampening effect on potential sharp price increases. However these stockpiles have reduced over time and it is expected that China’s imports will now facilitate further upward movement of the bauxite unit value in 2015. According to Antaike, China’s imports of bauxite reached 3.8Mt in May 2015 with a total 18.6mt in the first five months of 2015, 27% higher than the same period in 2014, but a 44% reduction on the 2013 figure (pre Indonesian bauxite ban).

Imports from Malaysia have increased steadily during 2015 to reach over six million tonnes for the first five months of the year. However, according to Reuters, 34 contractors in Pahang State in Malaysia have had their mining licences revoked effective from 1 August 2015, leaving only 11 operators with permission to mine bauxite in the area as Malaysia grapples with the effects of uncontrolled mining activities adversely affecting roads and port activities. There are calls for greater governance controls of extractive industries in Malaysia to better manage resources and perhaps follow Indonesia’s tactical move to reserve its mineral resources for domestic industry.

The average price of bauxite imports as shown by Antaike graph dropped to US$53 due to the increase in lower grade, higher moisture content Malaysian bauxite and lower freight rates in the marketplace.