With the continuous release of domestic alumina production capacity and the successive introduction of national environmental protection policies, the domestic supply and demand balance of domestic alumina raw materials has undergone major changes. Especially since May 2018, the supply of bauxite in Henan and Shanxi has been tight, and the price of bauxite has risen sharply. China's domestic alumina plants have begun to use imported ore as a raw material supplement.
Background and current situation of using imported mines
Domestic ore prices have risen sharply, there is a large gap in domestic demand, and the demand for imported ore has soared. As of the end of 2018, the ore gap in Henan and Shanxi provinces in China is about 2.5 million tons; the ore gap in the two places is expected to be around 18 million tons in 2019. A large amount of ore demand gap caused bauxite prices to rise sharply. At present, the price of imported mines is almost the same as that of domestic mines. If domestic mine prices continue to rise, the advantages of imported mines will become more and more obvious. As of October 2018, China's alumina production capacity, which mainly relied on imported bauxite, increased to 31.6 million tons, and its operating capacity also rose to 29.8 million tons.
According to the current alumina production capacity, the total demand for imported bauxite in China was 71.65 million tons in 2018. As domestic bauxite production is affected by factors such as environmental protection and mine remediation, more alumina companies will use imported bauxite, especially those in Shanxi and Henan. It is expected that the import volume of bauxite will increase to 74 million to 78 million tons.
In the past six months, the prices of domestic bauxite have gradually increased; in comparison, the prices of imported bauxite have been stable, and the prices of imported bauxite in some countries have even decreased slightly. If environmental protection and mine remediation in Shanxi, Henan and other places are not relaxed in the future, domestic bauxite prices will still rise, the price difference between domestic and foreign bauxite will shrink again, and even domestic bauxite prices will be higher than imported mines.
Global bauxite metallogenic belts are mainly distributed in Africa, Oceania, South America and Southeast Asia. In terms of national distribution, bauxite is mainly distributed in Guinea, Australia, Brazil, Jamaica, Vietnam and Indonesia. Among them, the proven bauxite reserves of Guinea (reserve 7.4 billion tons), Australia (reserve 6.2 billion tons), Brazil (reserve 2.6 billion tons) and Jamaica (reserve 2 billion tons) account for about 280 of the global bauxite reserves 65% of 100 million tons. From the perspective of global bauxite reserves, China's bauxite resources are not rich. The bauxite reserves are 980 million tons, which is not only much lower than Guinea, Australia and Brazil, but also lower than Vietnam and Indonesia even in Asia.
Currently, global bauxite trade flows mainly include: Indonesia, Australia, Guinea, India to China; Brazil and Jamaica to North America; Guinea to Europe. At present, this flow direction has changed, the outflow of bauxite from Indonesia has dropped significantly, and the flow of bauxite from Guinea into China has increased significantly. In 2018, Guinea's bauxite has become the first choice of Chinese enterprises, and the proportion of imports has gradually increased. Indonesia ’s previous banning bauxite export policy has led to a significant reduction in the amount of bauxite flowing into other countries. Currently, Indonesia ’s bauxite accounts for 6% of China ’s total imports. According to statistics, 50% of China's imported bauxite comes from Guinea, and the overseas bauxite projects mainly based on Guinea are expected to increase, and the absolute amount of bauxite supply has increased significantly. While 35% of imported bauxite comes from Australia, Australian high-temperature mines have gradually become lower in price with the involvement of Metro Metro and other miners and traders in the Weipa area, making them competitive in the market.
Australia's bauxite production has shown a steady growth, increasing from 61.78 million tons in 2006 to 87.9 million tons in 2017. It is the world's most important bauxite supply base. The output of Guinea's bauxite mine has accelerated in recent years, from 18.78 million tons in 2006 to 42.72 million tons in 2017, becoming a new supply base.
According to statistics, as of November 20, 2018, the inventory of 15 alumina plants in Shanxi Province averaged 32 days, and it is difficult to replenish the inventory. Therefore, 4 companies have begun to import bauxite. The average inventory of 8 alumina plants in Henan Province is 35 days. It is also difficult to replenish the warehouse. Some companies are considering using imported mines.
From the expected situation, 7 of the 15 enterprises in Shanxi Province have their own mines and are not included in the scope of imported mines for the time being. The remaining 8 companies have a bauxite gap of about 11 million tons in 2019 and need to import mines. Or make up for mineral sources in other regions. Among the 8 enterprises counted in Henan Province, 6 enterprises need external mineral sources to supplement. The bauxite gap in 2019 is about 7 million tons, which needs to be compensated by imported mines or other regional mine sources.
The influence of the global market on China's alumina industry
As the price of domestic monohydrate mines soars, China's alumina production capacity is shifting from the inland to coastal areas and overseas. The 2 million tons / year alumina project of Chinalco Fangchenggang was officially launched on September 28, 2018. The alumina project in Liaoning area is planned to have a total production capacity of more than 10 million tons. These signals fully prove that the future development center of alumina is already being transferred to coastal areas on a large scale. Of course, this also requires the country to introduce more targeted regulatory measures for the subsequent development of alumina.
According to the latest domestic and international bauxite price comparisons, foreign bauxite prices are relatively high, especially Guinea mines have the highest CIF due to high sea freight rates. Based on the price comparison analysis of Shanxi Xiaoyi bauxite mine, if the current alumina plant uses only 10% to 20% of imported ore to match the ore, the cost of alumina is almost the same as that of all domestic mine production.
The imported trihydrate mine is easy to dissolve, the dissolution method of low temperature and low alkalinity is generally adopted, and the comprehensive energy consumption is low. Considering that the silica content in the ore is relatively low compared to domestic monohydrate mines, the average silica content in Guinea and Jamaican ore is only 2.2% or less. In this way, although the mineral consumption increases, the alkali consumption can be greatly reduced. In the current situation where the price of caustic soda has always been high, it is still very beneficial to reduce the consumption of alkali and production costs by using the mixed use of domestic monohydrate + foreign trihydrate. It is expected that in the next step, more alumina producers using domestic monohydrate ore will be added to the camp of producers using imported or mixed use, and the possibility of investing in alumina plants in several major domestic port cities is also sharp rise.
Environmental protection and comprehensive utilization of red mud
The process of China's alumina industry from scratch to weak and strong has been restricting the problem that troubles us is the discharge of red mud. In recent years, with the increasing efforts of the country to deal with environmental protection, the problems of waste water and waste gas have been basically cured. The implementation of a series of environmental protection transformation projects such as ultra-low emission reconstruction of power plants and roasters and gas desulfurization has alleviated to a certain extent. Corporate environmental pressure. In recent years, many researchers and industrial enterprises have conducted a lot of research and exploration on the comprehensive utilization of red mud, such as building roads with red mud, making ceramic balls with red mud, etc., but due to the high processing cost, no major investment Scale application.
Now the domestic ore grade has dropped sharply, and it has already approached the active ingredient in red mud. At present, the more mainstream and more feasible method is the high-silicon red mud energy-saving series method and the use of high-speed red mud to recover iron, titanium and other elements in the red mud. These two methods have been applied in industrialization in Dongfang Hope and Jinjiang affiliated enterprises. This has alleviated to a certain extent the tremendous pressure caused by the decline in ore grade on business operations. This is the survival and development trend of domestic alumina companies. I believe that more companies will join the team exploring the comprehensive utilization of red mud in the future.
Based on the current changes in the bauxite market and future development trends, we believe that the industry's competitive landscape will change, that is, relying mainly on imported mines to alleviate the existing production crisis. However, from the perspective of the development trend of the alumina industry, when enterprises invest in the layout, environmental protection policies in port cities or southwestern regions will show a relatively relaxed trend, and these cities will likely obtain development opportunities. Opportunities and competition for alumina development in bauxite producing countries overseas (Indonesia, Guinea, Vietnam, etc.) will become more intense.
Excerpt from "China Nonferrous Metal News"