Demand for alumina from China is rising strongly, opening the door for international producers and traders to make some increased profits.
The combination of restrictions on bauxite mining leading to cuts at refineries, winter snow storms blocking logistics, and healthy demand for the key material has led to a step up in export sales to China.
Imports in December 2023 were at their highest for the year, at 240,000 tonnes. That pace has not slowed, with imports in January and February tracking at similar volumes. Part of this has been re-exporting, mainly through Bayuguan in north China. The southern port has seen big volumes for immediate delivery to smelters in Yunnan province.
The domestic price now sits north of RMB3200/tonne (around US$450/tonne). While domestic supply can't keep up with demand, the offset is that profitability is at its strongest for quite some time. According to our research, the average cost of production sat at a little over RMB2800/tonne.
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