Guinea bauxite prices moved lower last week after stabilizing for a month, despite some disruptions. A bauxite mining company in Guinea, which has suspended mining of late driven by a deadlock in labor negotiations, has not resumed mining, but will start negotiations on Oct 5. It was reported that Alufer's Bel Air mine in Guinea resumed production in August, making a contribution to bauxite supply in the country. However, the overall supply of bauxite in Guinea is still at a low level due to the rainy season and the ongoing supply disruption in the AXIS mining area.
Mysteel data showed that Guinea's total bauxite shipments over Sep 19-25 were 2.23 million tonnes, down 25.8 per cent on week.
According to Mysteel's tracking, a major bauxite mining company in Guinea lowered its FOB price for Q4 longterm contracts by USD 1 per dry metric tonne from Q3, leading to the CIF price for Q4 down USD 1 per dry metric tonne to USD 74 per dry metric tonne. However, Chinese refineries tried to reduce the prices further. The negotiation for the long-term contracts has not come to an end, but the downward trend is clear, and will affect the spot prices.
The sentiment on spot seaborne bauxite prices was bearish led by the Q4 long-term contract negotiations. However, the spot market can still get support from the current low shipments in Guinea's wet season. The recent three vessels of Guinea bauxite traded at USD 74-75 per dry metric tonne fully proved this support.
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On the demand side, China's alumina operating capacity and weekly production stood high, which was positive for bauxite demand. However, the pessimistic sentiment on alumina prices in Oct, high port stocks and the expectations of rising supply of Guinea bauxite in Q4 will continue to weigh on seaborne bauxite prices.
Mysteel data showed that total seaborne bauxite inventory at major ports was 28.96 million tonnes as of Sep 26, up 200 thousand tonnes from a week ago, and 8.23 million tonnes higher than the same period last year.
As of Sep 26, Mysteel's daily assessment for Guinea bauxite (Al:45%,Si:3%) was USD 73.5 per dry metric tonne, down USD 1 per dry metric tonne from a week ago. The assessment for Australian bauxite (Al:50%,Si:6.5%) remained flat at USD 70 per dry metric tonne. We expect seaborne bauxite prices to decline further in Q4 due to the downward trajectory of alumina prices and the expectations of rising supply from Guinea.
Also read: Guinea’s bauxite journey: From discovery to global dominance
Note: This news is published under the content exchange agreement with Mysteel.
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