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The shape and dynamics of the global bauxite and alumina industry are changing, according to a new report from Roskill. New alumina refining and bauxite production capacity are expected to boost supply over the next five years to meet the rising demand for aluminum, mainly from China, but also other growth areas such as the Middle East and India. The influence of China has changed the dynamics of the bauxite and alumina markets, and this will continue over the next five years.
World production of bauxite and alumina is growing. According to the report, Australia is the largest producer of bauxite, accounting for nearly 70 Mt in 2011; however, production in China, Indonesia and India has grown. Asia now accounts for 45% of global supply, compared with 16% a decade ago. This growth in non-captive bauxite production has led to sharp increases in shipped and traded bauxites, changing the dynamics of the marketplace.
Global alumina production increased from 80 to 96 Mt between 2007 and 2011, with most of the supply increase from China, which is now the largest producer. More refinery capacity is planned over the next three years, with another 14 Mt in China alone. If it is all commissioned as scheduled, then the market will be oversupplied in the short term, until demand from the aluminum industry catches up, according to the report.
The growth in Chinese demand for bauxite has seen a significant rise in imports over the last five years, mainly from Indonesia, but also from Australia. Total Chinese imports have risen from 9 Mt in 2006 to 45 Mt in 2011. In early 2012, the Indonesian government shook the industry by announcing curbs on exports of unprocessed minerals, which is being phased in over the next two years. As a result, Indonesian bauxite exports to China fell to an estimated 28 Mt, down from 36 Mt in 2011. This will provide opportunities for other bauxite producers currently planning expansions and new projects in other countries to step in.
For additional information, visit www.roskill.com.