Traders dealing with low grade Malaysian bauxite witness profits decline
2015-08-11 08:47:33 [Print]
BEIJING (Asian Metal) 11 Aug 15 - Malaysian bauxite operation costs increased because of charges rise from transportation and mining licenses. Bauxite owners raised offers by USD1-2/t to USD30-31/t FOB Malaysia for low grade bauxite Al 40-41% Si 5%max. However, Chinese consumers refuse to accept the price increase. Therefore, profits become less for bauxite traders and some of them consider dealing with high-grade washed bauxite.
A Malaysian bauxite trader reported that they once could supply 3-4 ships of low grade bauxite per month, but stopped the business from last month, as profits became less and risks increased. “Bauxite owners raised prices because of costs increase, and our purchase price is around USD30/t FOB Malaysia, higher than USD28-29/t in H1,” said the source, adding that they could earn profits of USD2-3/t in H1 but it is difficult to get profits at the current high price and in the risk from port congestion. Chinese consumers insist on low prices of USD40-41/t CIF China.
According to the source, they plan to supply washed high-grad bauxite Al 50% Si 3.5%max and the price will be higher. In addition, he noted that it needs consume around 3.5t of low grade Malaysian bauxite to produce one ton of alumina, so Chinese consumers prefer to high-grade bauxite.
Another trader dealing with Malaysian bauxite confirmed that they cannot purchase low grade bauxite at USD29/t FOB Malaysia now, as owners raised offers due to costs rise. “The price is USD30/t now, but Chinese consumers don’t accept price increase,” said the source, adding that their sales price is unchanged around USD40/t CIF China and profits become less and less.
The trader sold one ship with around 40,000-50,000t of low grade bauxite in July and they may have two ships in August. The first ship arrived in Malaysia late last week but may wait for ten days until shipment, due to port congestion problem, noted the source.
In addition, the source revealed that many small mining companies without mining licenses have stopped production, so bauxite supply volume may decrease from September.
A Malaysian bauxite trader reported that they once could supply 3-4 ships of low grade bauxite per month, but stopped the business from last month, as profits became less and risks increased. “Bauxite owners raised prices because of costs increase, and our purchase price is around USD30/t FOB Malaysia, higher than USD28-29/t in H1,” said the source, adding that they could earn profits of USD2-3/t in H1 but it is difficult to get profits at the current high price and in the risk from port congestion. Chinese consumers insist on low prices of USD40-41/t CIF China.
According to the source, they plan to supply washed high-grad bauxite Al 50% Si 3.5%max and the price will be higher. In addition, he noted that it needs consume around 3.5t of low grade Malaysian bauxite to produce one ton of alumina, so Chinese consumers prefer to high-grade bauxite.
Another trader dealing with Malaysian bauxite confirmed that they cannot purchase low grade bauxite at USD29/t FOB Malaysia now, as owners raised offers due to costs rise. “The price is USD30/t now, but Chinese consumers don’t accept price increase,” said the source, adding that their sales price is unchanged around USD40/t CIF China and profits become less and less.
The trader sold one ship with around 40,000-50,000t of low grade bauxite in July and they may have two ships in August. The first ship arrived in Malaysia late last week but may wait for ten days until shipment, due to port congestion problem, noted the source.
In addition, the source revealed that many small mining companies without mining licenses have stopped production, so bauxite supply volume may decrease from September.
Bauxite Guinean 45%min CIF China
Unit:USD/dt
China bauxite producers' number MoM output increase statistics by province by month
Unit: pcs
